The AI Bubble Is Here And It Is Popping, Warns Wall Street Analyst A prominent Wall Street analyst has issued a stark warning, declaring that the artificial intelligence market is in a bubble and that its peak may have already passed. The cautionary note singles out Nvidia, the company whose chips have become the bedrock of the AI boom, suggesting it is facing serious trouble ahead. The core of the argument is that the explosive demand for AI computing power, which has sent Nvidia’s valuation soaring into the trillions, is not sustainable. The analyst draws a direct parallel to the dot-com bubble of the late 1990s, stating this is not their first experience with such a market frenzy. They see clear signs of a bubble in the immense capital expenditures being made by tech giants, all chasing the same AI opportunity. These major cloud companies, like Microsoft, Google, and Amazon, are Nvidia’s primary customers, spending billions on its powerful GPU processors. The warning suggests that this spending spree is a bubble within a bubble. The first layer is the massive investment in AI infrastructure by a handful of large firms. The second, more dangerous layer, is the soaring stock market valuation of Nvidia, which is pricing in years of continued hyper-growth that may never materialize. The analyst points out a critical risk. Once these tech giants have built out their AI data center capacity, their demand for Nvidia’s chips will inevitably fall off a cliff. They will have the hardware they need, and the initial frantic buying will subside, leaving Nvidia with a sudden and severe drop in orders. This could trigger a dramatic downturn for the chipmaker. Furthermore, these same customers are actively working to reduce their dependence on Nvidia. They are developing their own custom AI chips in-house, a move that threatens Nvidia’s market dominance in the long term. If successful, this would permanently erase a significant portion of Nvidia’s future revenue stream. The report highlights that the current AI frenzy is being driven more by fear of missing out than by solid, profitable business models. Companies are investing heavily because their competitors are, not because they have clear paths to monetization. This herd mentality is a classic hallmark of a speculative bubble. For the crypto and Web3 space, which has become increasingly intertwined with AI narratives, this warning serves as a critical reality check. Many blockchain projects have integrated AI into their platforms and tokenomics, riding the wave of investor excitement. If the core AI market faces a significant correction, it is likely to have a spillover effect, dampening sentiment and investment in crypto-AI hybrids. The analyst concludes that Nvidia’s stock is showing clear technical signs of a major top, indicating that the smart money may already be starting to move away. The message to investors, both in traditional tech and in the crypto world, is to exercise extreme caution. The AI gold rush, which has powered much of the recent tech market optimism, may be nearing its end, and the hangover could be severe. The time for euphoria is over, and the time for risk management is now.
