AI giant Nvidia made $120 billion in profit last year. Investors are still spooked.
#Nvidia #AI profits #Market volatility #AI scare trade #Tech investments #AI bubble #Stock performance #Market uncertainty
📌 Key Takeaways
- Nvidia generated $120 billion in profits despite 5% stock drop
- AI scare trade erased $256 billion in market value
- Investor concerns spreading to other AI-related companies
- Analysts debate whether AI represents sustainable growth or bubble
- Wall Street analysts caution against panic despite risks
📖 Full Retelling
Nvidia, the world's most valuable company and AI giant, generated a staggering $120 billion in profits last year, including $43 billion in the quarter ending January 2026 at its Santa Clara, California headquarters, yet investors remain spooked by the 'AI scare trade' that erased $256 billion in market value after a 5% share price drop. The company's remarkable financial performance hasn't shielded it from market volatility, as Thursday's stock decline highlighted a broader phenomenon affecting the tech sector. Nvidia's position atop the AI food chain has made it both a beneficiary and a barometer of investor sentiment toward artificial intelligence technologies. CEO Jensen Huang emphasized during the earnings call that 'we have now seen the inflection of agentic AI' and that 'compute is revenues' in the new AI world, referring to the processing power needed for AI models like ChatGPT and Claude. This market reaction reflects growing uncertainty about whether the AI boom is sustainable or evolving into a bubble. Nvidia's shares have surged nearly 1,300% since 2021, driven by investor enthusiasm for AI, but so far this year, its stock price has barely moved. Some analysts, including HSBC, argue Nvidia needs a 'new narrative' to justify further stock growth, while broader concerns are affecting software companies like ServiceNow, Synopsys, and Salesforce, which have seen significant declines.
🏷️ Themes
AI Market Volatility, Tech Investment Concerns, Profit vs. Market Sentiment
📚 Related People & Topics
Nvidia
American multinational technology company
Nvidia Corporation ( en-VID-ee-ə) is an American technology company headquartered in Santa Clara, California. Founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, it develops graphics processing units (GPUs), systems on chips (SoCs), and application programming interfaces (APIs) for...
Volatility (finance)
Degree of variation of a trading price series over time
In finance, volatility (usually denoted by "σ") is the degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns. Historic volatility measures a time series of past market prices. Implied volatility looks forward in time, being derive...
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Original Source
AI giant Nvidia made $120 billion in profit last year. Investors are still spooked. The world's most valuable company is not immune to the "AI scare trade," as a 5% drop in its share price saw roughly $256 billion of market value erased. NVIDIA headquarters in Santa Clara, Calif. Justin Sullivan / Getty Images file Share Add NBC News to Google Feb. 26, 2026, 5:07 PM EST By Allie Canal Listen to this article with a free account 00:00 00:00 Nvidia — the most valuable company in the world thanks to its place atop the AI food chain — generated a staggering $120 billion in profits last year. This includes an eye-popping $43 billion during the three-month period ending in January, one of the strongest quarters of any business ever recorded. Investors didn’t seem to care. Shares of Nvidia fell more than 5% Thursday, following the results. With a total market value of roughly $4.5 trillion, the company’s one-day loss amounted to roughly $256 billion worth of market capital. Nvidia’s stock price decline is part of a broader phenomenon dubbed the AI “scare trade,” that is percolating in certain corners of the stock market. This bearish play threatens the very driver that has powered broader, double-digit gains across the benchmark S&P 500 for the past two years. And while the stock market might look broad, its gains are increasingly concentrated in just a handful of mega-cap names, including Nvidia. In other words, the entire market’s performance is heavily tied to the performance of these select companies. Nvidia says its growth story is very much still intact. “We have now seen the inflection of agentic AI and the usefulness of agents across the world and enterprises everywhere,” Nvidia CEO Jensen Huang said during the company’s quarterly earnings call Wednesday, referring to AI chatbots like OpenAI’s ChatGPT and Anthropic’s Claude. “You’re seeing incredible compute demand because of it,” he said. “In this new world of AI, compute is revenues.” Compute refers to the process...
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