Wall Street brushes off AI bubble fears: Nvidia earnings in focus

US stocks (^DJI, ^GSPC, ^IXIC) recover on Monday from the week prior's sell-off as investors look through AI bubble worries toward Nvidia (NVDA) earnings.

Yahoo Finance Senior Reporters Ines Ferré and Brooke DiPalma examine expectations around Nvidia earnings and analyst sentiment. B. Riley Wealth chief market strategist Art Hogan shares three things he wants to hear from an AI company's CEO ahead of Yahoo Finance's Invest conference.

To watch more expert insights and analysis on the latest market action, check out more Opening Bid.

Video Transcript

00:00 Brian

And as next big catalyst for AI, uh I I would say it's two. One, this Invest conference because we have Palantir CEO Alex Karp at this event. I'm jazzed up to hear from him. But it's Nvidia earnings on November 19th. As always, Nvidia has a high bar to clear and they have to clear it and they have to clear it by five country miles.

00:23 Speaker A

Yes, and um now we did get sort of a preview with that Jensen Wang speech down in uh DC a couple of weeks ago where he talked about the business and the books for Blackwell 500 billion dollars. I mean, that's just astronomical growth. Uh City came out with a note also uh raising their price target uh uh to 220 for Nvidia and reiterating their buy rating, but basically saying that supply is the bottleneck, not AI demand. and also underlining one point that Jensen Wang had mentioned and also the City note mentions as well. All of these assumptions uh for Nvidia are excluding China. So it's still assuming zero sales for China. So, uh look, it's just astronomical growth across the board.

01:21 Brian

Brooke, uh like I mentioned at the top, big sell off last week in AI stocks. I I'm thinking maybe that was a little bit of a bubble burst.

01:34 Brooke

Brian, what we saw last week was definitely investors sort of pulling back because of that heightened risk of a bubble and certainly the momentum that we've seen in these markets, as Art had mentioned, have just seen tremendous returns year to date. and we definitely saw some investors fearful because we also saw it in that sell off when it comes to Bitcoin. Gold stayed around the same momentum that 4,000 threshold as well. But definitely some fear that that bubble could pop. But largely what we're seeing now this morning is call outs from UBS, call outs from Morgan Stanley as well as an Oppenheimer that it wasn't necessarily the start of more declines, but rather a bit of a haircut, a bit of a trim back and the momentum is expected to persist into year end and 2026.

02:26 Brian

Art, last word to you on this. Uh like I mentioned at Invest for us later this week, we're going to talk to a lot of folks making waves in the AI space. What do you want to hear from a CEO of a highly valued AI AI company right now?

02:40 Art

Three things you need to hear. uh your CapX plans, do they continue a pace? Do you see any pullback there? We haven't heard any of that. Return on invested capital. When does this become profitable for you and give us a projection there? I think the the last is how you rationalize this in terms of where you are in that that paradigm of getting from the beginning, which started three years ago, to the end, the ultimate goal of uh that generative AI.

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