NVIDIA Corporation

A growing roster of investors, strategists and industry leaders are warning that the artificial-intelligence boom may be nearing a breaking point, with concerns shifting from the debt and interest rates funding massive data centers to the technology's potential for catastrophic harm. Ray Dalio said the bubble is nearing the point where it may burst because rising interest rates and increased borrowing to fund the AI infrastructure buildout create a need for cash, while strategist Joachim Klement said his core conviction is that the AI bubble will burst in 2027 or 2028. Michael Burry has taken short positions against Nvidia, Oracle, Palantir, Nebius, Micron and CoreWeave, arguing that enormous capital spending might not translate into durable returns, and Galaxy Digital CEO Michael Novogratz called it the biggest bubble of our lifetime while advising investors to ride the wave. OpenAI CEO Sam Altman said investors as a whole are overexcited about AI, and Sequoia's David Cahn put the annual gap between AI infrastructure spending and ecosystem revenue at nearly $600 billion, saying the bubble is reaching a tipping point. Anthropic CEO Dario Amodei called for slowing the pace of AI model improvements, with OpenAI's Sam Altman and SpaceX founder Elon Musk agreeing, after Anthropic insider Evan Hubinger put his personal estimate of the probability that AI could kill all humans at more than 10% within the next decade.

OpenAI's annualized revenue is running at roughly $50 billion, about $20 billion below the $68 billion figure that circulated in September after multiple outlets reported it as fact, and the gap is a measurement difference rather than a demand shortfall. The $68 billion figure came from a September 29 report traced to Axios and Reuters that appears to have used a gross revenue methodology counting the full dollar value flowing through OpenAI's cloud partnerships, including the portion passed through to infrastructure partners like Microsoft Azure, while OpenAI reports net revenue excluding those pass-through costs. On October 8, the Financial Times reported that OpenAI had told investors its annualized revenue was running at approximately $50 billion at the end of September, a figure CNBC confirmed the same day, with OpenAI's own disclosures to investors showing 77% total revenue growth and 107% enterprise revenue growth in Q3. The market did not wait for methodology clarification: Oracle fell 5%, with its $300 billion five-year cloud commitment to OpenAI representing roughly 45% of remaining performance obligations, Nvidia dropped 2.94% to $230.48, CoreWeave fell 8% amid insider selling reports and $3 billion in convertible debt overhang, and the Nasdaq 100 shed 300 points in thirty minutes on Thursday afternoon. Analyst consensus has converged on the word overblown, since the methodology difference does not change the fundamental demand trajectory, but the episode highlights how concentrated AI infrastructure valuations remain on a narrow set of demand assumptions from a small number of very large buyers.

Asia Plus Securities, or ASPS, assesses that the Thai stock market has a chance of a temporary short-term recovery, supported by the yield on 10-year US government bonds falling from 5.34% to 5.23%, together with the WTI crude oil price easing to near 91 US dollars per barrel after President Donald Trump signalled that he would not yet take military action against Iran before the midterm elections on 3 November 2026. Meanwhile, the auction of 22 billion US dollars of 30-year US government bonds drew strong interest, with a bid-to-cover ratio as high as 2.54 times, above the historical average of 2.41 times. However, ASPS still advises investors to be cautious about long-term volatility, because senior Federal Reserve officials are still signalling a tight monetary policy stance to bring inflation down to the 2% target. It expects US September CPI inflation to rise to plus 3.6% year on year, from plus 3.4% in the previous month. On the AI hardware stock front, the sector faced short-term profit-taking, led by CoreWeave down 8%, Oracle down 6%, and Nvidia down 2.9%, after OpenAI reported annual revenue at the end of September of about 50 billion US dollars, below the market expectation of 68 billion US dollars, and cancelled the launch plan for its GPT-6.1 Astra model and slowed its plan to list the company on the stock exchange. Meanwhile, Taiwan Semiconductor Manufacturing Company, or TSMC, reported record-high third-quarter 2026 revenue of 1.49 trillion Taiwan dollars, above the market expectation of 1.46 trillion Taiwan dollars, driven by demand for advanced chips for AI-processing GPUs and CPUs, along with plans to raise chip production prices next year. As for the Thai stock index, it most recently fell 14 points, or 0.88%, to 1,570.61 points, pressured by the transport and logistics group, which dropped 2.80% after news of preparations to collect three tourist fees and taxes totalling 2,570 baht, combined with concerns over the September consumer confidence index, which fell for the first time in four months amid the flood crisis and diesel prices surging above 40 baht per litre. ASPS recommends a strategy of catching a relief rally in domestic play, tourism, and healthcare stocks, with five standout picks: DISNEY19, which is entering the high season for fourth-quarter earnings on the buzz around the blockbuster film Avengers: Doomsday; AAPL80, which benefits from the upcoming launch of its first foldable-screen smartphone; Bangkok Expressway and Metro Public Company Limited, or BEM, which has a high chance of winning the contract to operate the southern Purple Line electric train, combined with third-quarter 2026 earnings that are expected to hit the year's peak; Com Seven Public Company Limited, or COM7, whose third-quarter 2026 profit is expected to grow more than 30% year on year; and Bangkok Chain Hospital Public Company Limited, or BCH, whose second-half revenue from foreign patients is trending strongly higher, led by patients from the Middle East, particularly the United Arab Emirates.

Nvidia shares fell 2.9% in the afternoon session after new details suggested OpenAI's revenue growth may be lower than previously believed. OpenAI told its investors it hit roughly $50 billion in annualized revenue at the end of September, significantly below the $68 billion figure widely reported late last month, according to CNBC; a person familiar with the matter said the higher figure included gross revenue from OpenAI's partners to allow a more direct comparison with rival Anthropic. The Financial Times, which first reported the discrepancy, said the $50 billion annualized figure appeared in a recent investor presentation as OpenAI prepares for a highly anticipated 2027 initial public offering. Although CNBC noted OpenAI's enterprise business still achieved 107% run rate growth in the third quarter, the shortfall raised concerns across the semiconductor sector about whether the capital expenditures driving Nvidia's chip sales are sustainable at current valuations. The AI-specific weakness was compounded by a sharp rise in the 10-year Treasury yield, which briefly surged to 5.36%, and climbing crude oil prices. Nvidia shares later recovered some losses to trade at $230.76, down 2.8% from the previous close.

The rush to finance artificial intelligence is rattling investors in the more than $10 trillion US corporate market, sparking a repricing of risk around the biggest technology companies that is showing up in spiking credit insurance prices, heightened volatility and weakening performance. Heavyweights including Oracle Corp., Broadcom Inc. and SpaceX are among the borrowers that priced nearly half a trillion dollars of new debt this year to pay for the infrastructure powering artificial intelligence, according to data compiled by Bloomberg, and Broadcom alone may raise about $600 billion to finance computing power in the coming years. News of a wave of potential fresh financings from SpaceX and Broadcom, possibly topping $100 billion, sent credit derivatives linked to hyperscalers and chipmakers climbing to prices that suggest traders see a growing risk of default over the next five years: above 20% for Oracle, about 16% for SpaceX and more than 7% for Nvidia Corp. Broadcom's five-year CDS widened by 3 basis points to a record 136 basis points on Thursday, while the cost of guaranteeing Oracle debt against default rose about 10.5 basis points to a record close of 261 basis points, and a measure of SpaceX's credit risk traded at a record for a second straight day after reports it is in talks with banks and investors to raise $40 billion to buy chips from Nvidia. This year there have been nine US high-grade deals of $25 billion or above, the most ever, most of them in tech, and the US high-yield market is poised for one of its busiest years on record. Investors and portfolio managers at Allspring Global Investments, T. Rowe Price and Wavelength Capital Management warn that the growing concentration of exposure to a small group of companies tied to the same AI investment cycle creates correlated risks that may not be fully reflected in current valuations.

Two former Groq engineers have sued in Delaware, alleging Groq's board improperly structured the 2025 transaction through which Nvidia acquired the company's AI technology. The deal consisted of a $17 billion licensing agreement plus a separate $3 billion Nvidia stock bonus pool for engineers who joined the chipmaker, and the plaintiffs argue the arrangement transferred Groq's core technology and much of its engineering talent without treating it as a conventional acquisition; Groq has called the lawsuit meritless. Nvidia said Groq 3 LPX, its first rack-scale LPU system combining Nvidia's high-throughput architecture with Groq's high-interactivity technology, is already in full production with volume shipments expected later this quarter, and the company said the system achieved 3,400 output tokens per second in an Artificial Analysis benchmark, four times faster responsiveness than the nearest alternative platform. Groq technology is also part of Nvidia's broader Vera Rubin platform, where management estimates revenue opportunity per gigawatt has expanded from roughly $18 billion with Hopper to $25 billion with Blackwell and $40 billion with Vera Rubin. Separately, the U.S. Department of Justice was reportedly probing Nvidia's Groq transaction, and FTC Chair Andrew Ferguson has said the agency would examine deal structures potentially designed to escape conventional merger review. Nvidia generated $96 billion of revenue in fiscal Q2 2027, more than double the prior-year level, with Data Center revenue of $89 billion, and management expects approximately 70% revenue growth in fiscal 2028 on a supply-constrained outlook; the stock traded at 24.88 times forward P/E as of October 6, with consensus calling for EPS growth of 95.23% in fiscal 2027 and 69.66% in fiscal 2028.

Oracle and Microsoft shares declined sharply on Thursday after the Financial Times reported that OpenAI's annualized recurring revenue was significantly less than previously reported. The FT said OpenAI's annualized recurring revenue, or ARR, was approaching $50B at the end of September, citing people familiar with the matter, while Axios reported late last month that OpenAI's ARR had approached $70B. Oracle shares fell more than 6%, Microsoft fell 0.5%, and Nvidia, which has supplied chips to OpenAI and has invested in the company, fell 2%. Other artificial intelligence-linked stocks, including CoreWeave and Nebius, also saw notable declines. OpenAI did not immediately respond to a request for comment from Seeking Alpha.