Key Points Nvidia just reported third-quarter revenue that reached record levels. The artificial intelligence chip leader confirmed trends spoken of by other tech giants in recent weeks. 10 stocks we like better than Nvidia › Nvidia (NASDAQ: NVDA) stock has roared higher over the past several years as artificial intelligence (AI) emerged as a game-changing technology. The company designs the most powerful AI chips around -- they're known as graphics processing units (GPUs) and are key to the develop ...

Nvidia posted blowout earnings. But a few big questions have yet to be answered. ...

The Real Risk in an AI Bubble https://t.co/Nf5pDY6fuJ ...

Now you can get access to the latest and highest-quality analysis of recent Wall Street buying and selling ideas with just one subscription to Beyond the Wall Investing ! There is a free trial and a special discount of 10% for you. Join us today!Nvidia Corporation ( NVDA ) is probably the most widely covered stock here on Seeking Alpha, with tens of articles written every month, sometimes with diametrically opposed views onDaniel Sereda is chief investment analyst at a family office whose investments span c ...

Core Insights - Amazon has signed a $38 billion deal with OpenAI to run its systems on Amazon's cloud services, indicating a significant investment in AI infrastructure [2] - Amazon's stock has decreased by approximately 10.7% over the past week due to concerns about AWS growth, competition in the cloud sector, and worries about the "AI bubble" [2][5] - Despite recent volatility, Amazon's fundamentals remain strong, with a market capitalization of $2.4 trillion and revenue of $670 billion [2] Financial Performance - Amazon's current share price is around $222, with a P/E ratio of 34, indicating it trades at a premium [6] - The company has demonstrated resilience during market downturns, historically rebounding quickly after significant declines [10] Market Concerns - The AI bubble theory raises concerns about over-investment in AI, which could lead to slower returns from AWS and increased scrutiny on Amazon's debt levels [5][6] - If AI-driven expenditures do not yield quick results, Amazon may face valuation pressure, impacting its growth potential [6] Investment Strategy - A diversified investment strategy, such as the High Quality Portfolio, may provide better risk management compared to holding individual stocks like Amazon [3][8] - Historical performance shows that Amazon has rebounded from significant declines, suggesting potential for recovery if investors maintain faith in its core business and long-term growth prospects [10]

Market Overview - Major stock indices experienced significant declines, with the Dow dropping 498.50 points (1.1%) to 46,091.74, the Nasdaq falling 275.23 points (1.2%) to 22,432.85, and the S&P 500 decreasing 55.09 points (0.8%) to 6,617.32, marking their lowest closing levels in a month [1] - The weakness in stocks was exacerbated by a decline in Nvidia shares, which fell 2.8% after a 1.8% drop on Monday, as investors awaited the company's quarterly results [2] Company-Specific Insights - Nvidia's upcoming quarterly results are highly anticipated, with potential implications for the market amid concerns about an AI bubble; even a slight disappointment could lead to broader market sell-offs [3] - Home Depot's stock fell 6.0% following weaker-than-expected third-quarter earnings and a reduction in full-year earnings guidance, contributing to the overall decline in the retail sector [6] Sector Performance - The NYSE Arca Computer Hardware Index saw a significant drop of 3.7%, with semiconductor and software stocks also experiencing notable weakness, impacting the tech-heavy Nasdaq [5] - The Dow Jones U.S. Retail Index declined by 2.4%, reflecting considerable weakness in the retail sector [5] - Conversely, oil stocks rose, with the NYSE Arca Oil Index increasing by 1.4% due to a sharp rise in crude oil prices [6] Economic Data - The Commerce Department reported a 1.4% increase in new orders for U.S. manufactured goods in August, rebounding from a 1.3% decline in July, aligning with economist estimates [4]

Market Overview - All three major stock indexes experienced declines, with the Dow Jones Industrial Average dropping approximately 450 points (0.9%), the S&P 500 decreasing by 0.5%, and the Nasdaq falling by 0.8% [1] Tech Stock Performance - Major tech stocks such as Amazon and Microsoft each fell by 3.5%, while Nvidia declined by 2.8%. Other notable declines included Meta (2.5%), Palantir (2.5%), Tesla (2.4%), Alphabet (1.8%), Broadcom (1%), and AMD (5.5%) [2] - Home Depot led losses in the Dow with a 4.3% drop following an earnings miss, alongside declines in several bank stocks including Visa (1.8%), American Express (1.6%), JPMorgan Chase (0.7%), and Goldman Sachs (0.3%) [2] Investor Sentiment on AI Stocks - A Bank of America survey indicated that 45% of global fund managers perceive AI stocks as being in a bubble, with concerns that some companies are over-hyped and disconnected from their actual value [3] - Approximately 53% of investors believe AI stocks are already in a bubble, a slight decrease from 54% in October [3] - The survey highlighted that concerns over the magnitude and financing of the AI boom are driving investor sentiment, marking the first time since 2005 that a majority expressed worries about overinvestment in the sector [3]

Core Viewpoint - Meta Platforms is facing profitability challenges due to aggressive spending on artificial intelligence (AI) infrastructure, as highlighted in a recent investor note from MoffettNathanson [3][6]. Financial Performance - Meta's stock price has decreased nearly 20% over the past month, influenced by its latest earnings results released on October 29 [3]. - MoffettNathanson has revised its price target for Meta's stock from $875 to $750, while still maintaining a "buy" rating [8]. Investment Strategy - Meta is heavily investing in AI infrastructure to compete with other major tech companies like Amazon, Microsoft, and Alphabet, which are also investing significantly in AI [3][9]. - The firm notes that Meta's capital expenditures (capex) are projected to reach 47% of revenue next year, significantly higher than Microsoft (29%), Alphabet (26%), and Amazon (16%) [10]. Market Position - Analysts express concerns that Meta is attempting to compete at a level beyond its current capabilities, particularly as it lacks a cloud platform that its peers possess [9][10]. - There are worries about a potential AI bubble, reminiscent of the dotcom era, raising questions about the long-term viability of these investments [5].

master1305 / iStock via Getty Images Alphabet Inc. (NASDAQ: GOOGL) CEO Sundar Pichai told the BBC that no company in the sector is immune if the artificial intelligence (AI) bubble bursts. He admitted there are “elements of irrationality.” The statement harkens back to descriptions of the dot-com bubble, which knocked out hundreds of companies in 2000 and 2001. 24/7 Wall St. Key Points Alphabet Inc. (NASDAQ: GOOGL) CEO Sundar Pichai says no company in the industry is immune if the AI bubble bursts. C ...

Market Performance - The S&P 500 has lost approximately 2.6% since the beginning of November and around 2.5% over the past week as of November 17, indicating increasing volatility and investor nervousness [1] - The CBOE Volatility Index has surged nearly 35% since November 11, reflecting heightened concerns about valuations and a potential AI bubble [1] Interest Rate Outlook - Markets are currently pricing in a 46.6% likelihood of another interest rate cut in December, a significant decrease from previous expectations [2] - Retail investors are showing reduced confidence in a U.S. market rebound, with dip-buying activity slowing as stocks retreat from recent highs [2] AI Bubble Concerns - Fears regarding inflated AI valuations are contributing to broader market pressures, with the tech-heavy Nasdaq Composite dropping about 4.8% since the beginning of November and 3.2% over the past week [3] - Concerns over the sustainability of the AI boom highlight sector concentration risks and potential systemic vulnerabilities, which can lead to negative market reactions and investor panic [4] Investment Strategies - Investors are advised to adopt a defensive and conservative investment approach to navigate potential market volatility [6] - Increasing allocations toward defensive funds may provide a balance between participating in potential upside and protecting against volatility [7] ETF Recommendations - Value ETFs, such as Vanguard Value ETF (VTV), iShares Russell 1000 Value ETF (IWD), and iShares S&P 500 Value ETF (IVE), are characterized by solid fundamentals and represent undervaluation [8] - Consumer staple ETFs, including Consumer Staples Select Sector SPDR Fund (XLP), Vanguard Consumer Staples ETF (VDC), and iShares U.S. Consumer Staples ETF (IYK), can provide stability and balance to portfolios [10] - Quality ETFs, such as iShares MSCI USA Quality Factor ETF (QUAL), Invesco S&P 500 Quality ETF (SPHQ), and JPMorgan U.S. Quality Factor ETF (JQUA), offer a strategic response to market uncertainty [11] Investment Strategies for Stability - Investors may consider passive, long-term strategies like buy-and-hold or dollar-cost averaging to navigate potential near-term pullbacks while positioning for sustainable returns [12][13]