Wall Street Breathes Easier: Nvidia’s Blowout Earnings Quiet AI-Bubble Worries

Quick overview

Wall Street’s bulls argue that the risks surrounding artificial intelligence are already priced in.

While debates over a potential AI bubble persist in 2025, a growing group of Wall Street analysts and investors is making the opposite case: the fundamentals behind demand for AI remain strong, and there are reasons to believe in a sustainable bullish scenario.

These “apostles of optimism” highlight several drivers behind their conviction.
First, the mass adoption of AI across sectors—from cloud computing to manufacturing and services—suggests a real market, not just speculation.

Second, technological advances continue to fuel the need for specialized hardware, data centers, and high-performance chips, underpinning the companies that supply these components.

Third, some investors argue that we’re still in the early innings of the adoption cycle, as many firms are only beginning to integrate AI—pointing to years of potential growth ahead.

Wall Street believes AI still has room to run

“In our view, concerns about an AI bubble are vastly overstated,” wrote Wedbush analyst Dan Ives in a note last week. He said Nvidia’s earnings report is “another data point validating the AI revolution,” adding that the market is “at the top of the third inning in this AI game.”

From a financial perspective, several Wall Street executives note that although valuations appear elevated, the projected revenues, future demand, and competitive advantages of leading companies could justify those multiples. In their view, these valuations are “ahead of their time” but sustainable as global AI expansion takes hold.

Skeptics, however, haven’t gone away. Warnings remain centered on the risk that such rapid and uncertain growth may not translate into proportional returns, that many companies could disappoint expectations, or that a slowdown in the economy—or a strategic misstep—could trigger a sharp market correction.

Even so, the bulls counter that these risks are already priced in, pointing to the very real contracts, investments, adoption trends, and the expanding ecosystem in front of them.

“The lesson of the dot-com era is that there was a bubble and it burst. We don’t believe we’re in a similar situation now when it comes to AI,” said Bob Michele, Chief Investment Officer at J.P. Morgan.

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Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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