Nvidia’s Q2 earnings soar to $26.4 billion, a 59% increase YoY. Revenue grows 56% to $46.7 billion, but gross margin dips to 72.4%. Diluted EPS rises to $1.08. Future revenue projected at $54.0 billion, gross margin at 73.3%. No assumptions made on H20 shipments to China.

Experts debate the existence of an AI bubble. OpenAI’s CEO believes we are in one, while Mark Zuckerberg and Jeff Bezos express concerns. Gartner’s analyst predicts a market correction for agentic AI. Former Intel CEO Pat Gelsinger acknowledges the bubble, while Nvidia’s CEO disagrees with comparisons to the dotcom bubble.

Bank of America analysts update Nvidia shares outlook amidst AI bubble fears. They highlight differences in infrastructure, capex intentions, Fed rates, and valuation compared to the dotcom era. They foresee limits on data center overbuilding and minimal risks from tariff tensions for AI vendors.

Challenges facing Nvidia include weakness in the gaming market, competition with major firms, and restrictions on compute shipments to China. Additionally, sales in new markets are unpredictable, and there is potential for decelerating capital returns. Government scrutiny of Nvidia’s market dominance in AI chips is also a concern.

Bank of America maintains a buy rating for Nvidia with a target price of $235, based on a 37 multiple of their estimated price-to-earnings ratio. The analysis reflects a cautious optimism amidst the ongoing discussions surrounding the AI bubble and its potential impact on the market. Nvidia’s price-to-earnings range for 2026 is 25 to 56, excluding cash. An analyst believes this multiple is justified by Nvidia’s leading position in AI markets, despite concerns about global AI project variability, gaming market cyclicality, and power accessibility issues. The analysis was originally reported by TheStreet on Oct 14, 2025.

Read more at Yahoo Finance: Bank of America updates Nvidia stock outlook on AI bubble fears