Nvidia stock has pulled back from recent highs amid concerns of a bubble in artificial intelligence stocks.
Last week, OpenAI Chief Executive Sam Altman told reporters that he thinks the AI market is in a bubble, the Verge reported.
"Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes," Altman said. He warned that some investors are likely to get "very burnt" as some of the AI hype unwinds.
On Monday, Bloomberg tech columnist Dave Lee said that investors should brace for an "AI winter." He cited the poor reception to OpenAI's new model GPT-5, the CoreWeave stock tumble, and a McKinsey survey that showed most companies haven't seen a profit benefit from generative AI technology.
On the stock market today, Nvidia stock fell a fraction to close at 175.40. Earlier in the day, it was down as much as 3.9% to 168.80. On Tuesday, Nvidia dropped 3.5% to close at 175.64.
Other AI stocks falling on bubble fears include Advanced Micro Devices, Broadcom, Dell Technologies, Palantir Technologies and Super Micro Computer.
In a client note Wednesday, Wedbush Securities analyst Daniel Ives said the bears are coming out of hibernation mode, sparking some "white-knuckle moments" for investors in AI stocks.
Nvidia Stock Is On Five IBD Lists
Elsewhere on Wall Street, Deutsche Bank analyst Ross Seymore reiterated his hold rating on Nvidia stock with a price target of 155.
Meanwhile, KeyBanc Capital Markets and Susquehanna raised their price targets on Nvidia stock ahead of the company's quarterly report next week. Both have buy ratings on Nvidia.
Nvidia is due to report its fiscal second-quarter results next Wednesday. Analysts polled by FactSet expect the chipmaker to earn an adjusted $1 a share on sales of $45.87 billion in the quarter ended July 27. In the year-earlier period, it earned an adjusted 68 cents a share on sales of $30.04 billion.
For the current quarter, Wall Street is modeling adjusted earnings of $1.19 a share on sales of $52.73 billion. In the fiscal third-quarter last year, Nvidia earned an adjusted 81 cents a share on sales of $35.08 billion.
Nvidia stock is on five IBD lists: IBD 50, Big Cap 20, Leaderboard, Sector Leaders and Tech Leaders.
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