Amid ongoing fears about the potential AI bubble, market attention is focused on Nvidia as it prepares to announce its third-quarter earnings after Wednesday’s market close. Nvidia is considered a critical indicator for the AI sector, with many leading tech companies relying heavily on its graphics processing units (GPUs). According to analysts, the recent earnings reports suggest strong revenue streams for major hyperscalers extending into 2026-2027, which has led investors to closely monitor Meta, a company that lacks a server business and serves as a key barometer for the next wave of AI application revenue.
Yuri Khodjamirian, Chief Investment Officer of Tema ETF, characterized the current market sell-off as a “healthy dose of skepticism.” He explained that investors are coming to terms with the reality that the substantial deals announced over the summer will require funding. Notably, OpenAI has recently made significant spending commitments towards GPUs and the construction of data centers. Khodjamirian noted that while some stocks appear to be correcting, the overarching trend among tech giants like Microsoft, Meta, and Nvidia remains upward as they continue their data center build-outs.
Further insight came from David Groman, global equity strategist at Citi. He commented on the shift toward vendor financing and tapping into credit markets among major tech firms, including Amazon’s recent bond sale—the first in three years. Groman also discussed Citi’s “bear market checklist,” which assesses 18 factors like valuation, sentiment, and market positioning. Although some indicators are flashing red reminiscent of valuations in 2000, he emphasized that signs of froth typically associated with a market downturn, such as heavy inflows into equities or active mergers and acquisitions, are not currently evident.
This perspective suggests that while a degree of caution is warranted among investors, particularly in light of the uncertain macroeconomic environment, there remains optimism about the potential for recovery in the equity markets. As the Federal Reserve continues to navigate interest rates—possibly pausing during the first quarter of 2026—the notion of “buying the dip” may still hold merit for those seeking long-term investments in a historically volatile sector.