Key Points

• Despite a record 106% increase in revenue, NVIDIA's stock price still fell.
• Intel's sharp decline has exacerbated the selling of AI chip stocks.
• Wall Street begins to question the returns on large-scale AI infrastructure investments

Due to growing concerns on Wall Street regarding spending on artificial intelligence, NVIDIA's stock price fell by nearly 5% on Friday (October 30th), with large semiconductor companies once again facing selling pressure.

NVIDIA, along with AMD and Intel, saw declines, prompting investors to re-evaluate the huge costs required to expand AI's infrastructure. On that day, the Nasdaq Composite Index fell by more than 2%.

This decline is particularly noteworthy as NVIDIA's fundamentals continue to expand at an astonishing rate. The company recently announced quarterly revenue that increased by 106% year-over-year, indicating that the demand for advanced AI chips remains extremely strong.

Revenues of $9.6 billion still fail to appease investors

In its financial report released in August, NVIDIA disclosed that its revenue for the second quarter of fiscal year 2026 was $96.2 billion, more than doubling from $46.7 billion a year earlier.

Data center business revenue reached $89 billion, a year-on-year increase of 117%; quarterly net profit grew by 126%, to approximately $59.7 billion.

These data highlight the significant differences between NVIDIA and several other technology companies that are currently facing financial pressures.

NVIDIA has made considerable profits by selling the infrastructure required to build artificial intelligence systems. However, many of its largest customers have not seen a return on that investment before they invested substantial amounts of money.

This difference has become the core of how Wall Street views the changes in the trading methods of AI.

Earlier this month, Coinpaper reported a widespread sell-off in semiconductors, during which all 30 major chip stocks fell simultaneously.

The decline on Friday indicates that unless investors become more confident about the long-term economic prospects of the industry, they are still reluctant to assign higher valuations based solely on the impressive AI growth.

Intel Plunges 29%, Amazon and Google Intensify Concerns over AI Expenditure

The latest pressure intensified after Intel released a disappointing performance outlook, with its stock price falling by about 29% during trading on Friday.

AMD also fell by about 10%, while according to in-market reports, NVIDIA fell by about 4% to 5%.

However, Intel's difficulties are not the same as NVIDIA's. Intel is facing manufacturing challenges, weak demand for personal computers, and questions regarding its profitability, while NVIDIA continues to report strong growth in its data center business.

The common concern is: how much capital enterprises must invest in order to remain competitive in the AI field.

Amazon recently announced that its free cash flow over the past 12 months has deteriorated from a positive $14.8 billion to a negative $42.4 billion.

As analyzed by Coinpaper regarding Amazon, despite a 39% increase in revenue for Amazon Web Services ( AWS ), this reversal still occurred.

Alphabet is also facing similar scrutiny, as its quarterly capital expenditure reached $51.4 billion, resulting in a free cash flow of approximately -$9.1 billion.

Deteriorating cash flow indicates that the rapidly expanding AI business may generate more cash in the short term than the originally profitable companies.

Can NVIDIA's stock price rebound before the next financial report?

NVIDIA's next quarterly earnings will once again become an important test of investors' confidence.

The company previously provided revenue guidance for the third quarter of fiscal year 2026 at approximately $108 billion, with a range of plus or minus 2%, and an estimated gross margin of nearly 74%.

If this expectation can be met, it will indicate that the computing infrastructure requirements for AI continue to exist; however, investors will also be looking at future guidance as well as customer spending trends.

Higher interest rates are also another risk, especially as tech companies are increasingly financing new infrastructure through borrowing.

Microsoft plans to issue $25 billion in bonds, indicating that borrowing is becoming a more prominent part of the AI investment cycle.

Nevertheless, NVIDIA's exposure is not limited to traditional cloud service providers. Demand from AI startups, governments, and industrial computing projects may help diversify its customer base.

The company is also advancing partnerships aimed at the industrial AI sector, with the goal of expanding applications to robotics and manufacturing.