NEW YORK — November 10, 2025 — Bank of America (BofA) has revised its outlook on Nvidia (NASDAQ: NVDA), citing growing skepticism surrounding the profitability and long-term sustainability of the artificial intelligence (AI) sector. The move comes as global investors await Nvidia’s third-quarter earnings on November 19.
Analysts Express Concern Over AI Profitability
BofA analyst Vivek Arya and his team stated that while Nvidia remains dominant in AI hardware, uncertainty is rising across the broader technology landscape. Their latest research note suggests that inflated expectations around AI-driven growth may face correction as investors reassess valuations.
The analysts noted, “AI remains transformative, but current market sentiment reflects excessive optimism unsupported by sustainable profit models in software development.”
Nvidia’s Dominance Faces New Investor Scrutiny
Nvidia’s central role in the AI revolution has made it one of the world’s most-watched technology companies. CEO Jensen Huang continues to defend the sector’s strength, arguing that AI represents a “technological renaissance” rather than a speculative bubble.
Huang previously revealed that Nvidia had secured $500 billion in chip orders over the next five quarters, underscoring the company’s leadership in high-performance computing and data centre solutions. However, analysts warn that the AI software sector’s weak returns could dampen enthusiasm and slow momentum.
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Experts Debate Whether AI Growth Is Sustainable
While some market leaders, including Jeff Bezos, believe AI resembles the biotech boom of the 1990s, others fear parallels with the dot-com bubble, when inflated valuations eventually collapsed.
Industry observers point to OpenAI’s financial strain as a warning sign. The company reportedly lost over $12 billion in Q3, according to filings tied to Microsoft’s investment disclosures. With plans to spend $1.4 trillion on computing infrastructure over the next eight years, OpenAI’s path to profitability remains unclear.
Federal Stance Rejects Industry Bailouts
Adding to investor caution, David Sacks, the U.S. government’s artificial intelligence and crypto adviser, confirmed that no federal bailouts would be offered to support struggling AI firms.
“AI must stand on its commercial viability,” Sacks said. “Public funds will not be used to absorb corporate mismanagement.”
This announcement further fueled speculation that only a handful of firms with strong financial discipline — like Nvidia — could endure a potential industry correction.
Market Awaits Nvidia’s Q3 Earnings for Direction
Investors see Nvidia’s upcoming Q3 results as a litmus test for AI’s broader financial health. A disappointing report could trigger selloffs across semiconductor and AI-related equities, while strong earnings may reassure traders and revive confidence.
“Nvidia’s numbers will set the tone for the entire AI sector through early 2026,” said Laura Kim, a senior markets strategist at CitiGroup. “The question is no longer about innovation — it’s about profit execution.”
Bank of America Adjusts Its Long-Term Projections
While BofA reaffirmed Nvidia’s long-term leadership position, it reduced its price target to reflect “tempered investor expectations” and potential slower demand cycles in AI adoption.
The report emphasized that investors should distinguish between short-term hype and long-term fundamentals, focusing on companies that demonstrate operational efficiency and diversified revenue streams.
AI’s Next Chapter Depends on Market Confidence
As the AI landscape matures, analysts predict a natural market consolidation, with weaker players exiting and established firms strengthening their dominance. Nvidia’s ability to navigate these shifts will likely determine whether the AI market continues its exponential growth trajectory or faces a correction period.
For now, the market remains cautiously optimistic, awaiting Nvidia’s financial disclosures to assess the true strength of the ongoing AI revolution.
