NVIDIA Earnings & ‘Tech Bubble’ Talk

26/08/25

Nvidia reports its second-quarter earnings this Wednesday after market close, and it is not an exaggeration to say that the fate of the broader market may well hang on the numbers.

With consensus estimates sitting around $46 billion in revenue¹, analysts know the topline will be vast. The real issue is whether the company can continue to embody the artificial intelligence boom or whether it has become the very symbol of a bubble in the making.

The debate has been given fresh fuel by none other than Sam Altman, the normally understated head of OpenAI, who recently warned that investors were getting “overexcited” and that a “phenomenal” amount of money could yet be lost². Coming from the man whose company arguably lit the fuse on the AI revolution, the comment has lingered. It is difficult to be quite as enthusiastic about Nvidia when the field’s most prominent visionary is urging caution.

Then there is China, a market that has long been both a prize and a pressure point for Nvidia. The H20 chip, engineered to comply with Washington’s export curbs, had looked set to hit the market in volume. Instead, reports suggest Beijing raised concerns, and Nvidia has quietly told some suppliers to pause production³. Chief Executive Jensen Huang insists the group is working hand in glove with U.S. authorities on a successor chip, known colloquially as the B30A, while denying rumours of security backdoors⁴. For the near term, most analysts are pencilling in little, if anything, from China⁵.

Supply chain limitations provide a second headwind. Advanced packaging – the painstaking process at TSMC that turns wafers into the finished jewels of AI – remains constrained even after expansions⁶. High-bandwidth memory, the lifeblood of these accelerators, is another pinch point: SK Hynix says next year’s capacity is already sold out. Samsung and Micron are racing to fill the gap, but no one pretends shortages are going away quickly⁷.

Normally such operational wrinkles would be shrugged off. But Nvidia has grown into a $4 trillion colossus, representing more than 7 per cent of the S&P 500⁸. That means if its shares were to tumble by 10 per cent after earnings, the index itself would lose roughly three-quarters of a percentage point.

This is why Wednesday’s results matter far beyond Silicon Valley. If Nvidia reassures us that demand continues to run ahead of supply, that Blackwell chips are ramping smoothly, and that China is merely a matter of timing rather than a roadblock, then the bubble talk may die down. If not, the entire AI trade could be in for a reassessment.

This article is for informational purposes only and does not constitute investment advice, a personal recommendation, or an offer or solicitation to engage in any investment activity. The mention of any security, commodity or issuer should not be interpreted as a recommendation to buy or sell. Any views expressed are based on public information believed to be reliable at the time of writing, but no representation or warranty is given as to its accuracy or completeness. 

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Footnotes 

¹ Consensus Q2 FY 2026 revenue estimate ~ $46.4 billion (S&P Global).
² Sam Altman cautioned that investors are “overexcited” and warned of a “phenomenal amount of money” potentially being lost in an interview with The Verge (The Verge).
³ Nvidia instructed suppliers to pause H20 chip production following security concerns raised by Chinese authorities (Yahoo Finance).
⁴ Jensen Huang confirmed ongoing dialogue about a successor chip (“B30A”) with U.S. officials and denied security backdoor allegations (MarketWatch).
⁵ William Blair analyst Sébastien Naji expects zero revenue from China in Q2, projecting any H20-derived revenue to shift into the second half (Barron’s).
⁶ TSMC is expanding CoWoS advanced packaging capacity to approximately 75,000 wafers per month by 2025 (TrendForce).
⁷ SK Hynix reports its 2025 high-bandwidth memory output is already sold out (Yahoo Finance).
⁸ Nvidia’s market capitalisation of around $4 trillion places it at more than 7 per cent of the S&P 500 (FT).