Published by Global Banking & Finance Review®
Posted on November 20, 2025
3 min readLast updated: January 20, 2026
Add as preferred source on GoogleNvidia's stock rally stalls as valuation concerns emerge. Semiconductor stocks decline, and global tech shares face volatility amid AI spending worries.
By Rashika Singh, Rae Wee and Shashwat Chauhan
(Reuters) -U.S. technology stocks failed to hold on their initial gains on Thursday, as a rally driven by Nvidia ran out of steam with concerns of lofty valuations in the technology space coming back to the fore.
Nvidia's shares were last down 2.2% after surging 5% earlier in the day when its stellar results tempered some concerns over a potential AI bubble, although questions about the payoff from the massive spending boom remain.
The global bullish spirit faded among U.S. stocks around midday, with chipmakers Advanced Micro Devices and Micron Technology tumbling 5.8% and 8.3%. The Philadelphia SE Semiconductor Index was last down 2.8%.
"The people who are selling the semiconductors to help power AI doesn't alleviate the concerns that some of these hyperscalers are spending way too much money on building the AI infrastructure," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
"You have the company that's benefiting it, but the others are still spending too much money."
Shares of Microsoft also dropped 1.3, while Alphabet was trading around flat.
The European tech index also closed well off its session high at a 0.1% gain, with Dutch firm ASML closing only 0.4% higher after surging as much 3.2%.
U.S.-listed shares of Taiwan's TSMC were last down 0.6%. Early on in Asia, SK Hynix closed up nearly 2% and Japan's Nikkei reclaimed the 50,000 mark as chip suppliers and AI-linked stocks surged.
Investors took to heart after Nvidia CEO Jensen Huang dismissed bubble concerns, calling demand "incredible" and noting bookings extend into 2026. "We see something very different from a fleeting hype cycle," he said, pointing to Nvidia's deep integration across cloud, enterprise and edge computing.
"Amid a swell of concern heading into this print, Nvidia delivered not just solid results and guidance, but a beat-and-raise that was even stronger than most had expected," J.P. Morgan analysts said.
"In our view, (the results are) a testament to strong execution across Nvidia's vast and complex supply chain."
While some hailed the company's upbeat results as proof that the AI boom was intact, others worried about external risks tied to its customers' capex and financing, and challenges surrounding the build-out of data center capacity due to energy constraints and memory chip shortages.
Nvidia is also highly reliant on a handful of customers and the increasingly circular nature of some of its deals has raised concerns, as AI startups struggle to turn big profit to justify billions of dollars in funding.
However, Nvidia's status as the face of the AI revolution has made it the only company in the world to cross the $5 trillion valuation mark, following a surge in its share price of more than 1,190% over the past three years.
Amid the volatility, Nvidia was last down almost 8% in November. The stock, however, is still up more than 36% for the year.
Nvidia's 12-month forward price-to-earnings ratio stands at 28.44, below AMD's 35.70 and far lower than Intel's 62.38.
The results marked Nvidia's first acceleration in seven quarters, powered by surging data-center sales. Revenue forecast topped estimates and margins are expected to hold in the mid-70% range through fiscal year 2027.
"Demand still outstrips supply, with hyperscalers and server makers buying aggressively," said Bob O'Donnell, chief analyst at Technalysis Research.
(Reporting by Rae Wee in Singapore, Rashika Singh and Shashwat Chauhan in Bengaluru; additional reporting by Arsheeya Bajwa and Twesha Dikshit; Editing by Jacqueline Wong, Ronojoy Mazumdar, Anil D'Silva and Maju Samuel)
Artificial Intelligence (AI) refers to the simulation of human intelligence in machines programmed to think and learn. AI technologies are increasingly used in various sectors, including finance and technology.
Chipmakers are companies that design and manufacture semiconductor chips used in electronic devices. They play a crucial role in the technology industry by providing the components necessary for various applications.
The price-to-earnings (P/E) ratio is a valuation metric calculated by dividing a company's current share price by its earnings per share (EPS). It helps investors assess the relative value of a company's stock.
Market capitalization is the total market value of a company's outstanding shares of stock. It is calculated by multiplying the current share price by the total number of shares outstanding.
Explore more articles in the Finance category
