Nvidia's record-breaking earnings seemed to rekindle expectations for AI investments, but warning remarks from a senior U.S. Federal Reserve official have resurfaced speculation about an "AI bubble."
NVIDIA, the world's largest semiconductor design company, announced that its revenue for the third quarter of 2025 reached $57.01 billion (approximately KRW 83.4 trillion), a 62% increase year-over-year. This boosted optimism in the New York Stock Exchange, which had recently been on the decline, and temporarily revived investor sentiment. NVIDIA currently holds a dominant position in the AI semiconductor market, and its performance is considered a key indicator of the state of the AI industry as a whole.
However, on November 20th (local time), the day after the earnings announcement, Federal Reserve Board Governor Lisa Cook remarked that "the potential for overvalued assets to decline in price has increased," rekindling concerns about the overheating of AI-related assets. Cook's remarks fueled investor anxiety about the potential impact of an "AI bubble" on the broader stock market. Indeed, the New York Stock Exchange, which had been falling for two consecutive days, is struggling to find its bearings despite this positive news.
This trend has also influenced how individual investors consume information. According to Google Trends, search interest for the term "Nvidia earnings announcement" on YouTube in Korea surged 1,200% in just one week, reaching a shocking peak of 100 on the day of the announcement. In particular, Korean individual investors investing in US stocks (aka "seohak ants") reacted sensitively to the market, immediately following earnings announcements through YouTube live broadcasts rather than news reports.
Warnings about the high expectations and investment frenzy surrounding AI technology have been raised before. Michael Burry, the investor known for his role in "The Big Short," has argued that large AI infrastructure companies are artificially inflating their profits by reducing depreciation expenses on their books, raising the possibility that the current market rally may be temporary. Based on this, he argues that the AI boom could be a temporary overheating.
Meanwhile, with the Federal Open Market Committee (FOMC) scheduled to decide whether to cut the benchmark interest rate at its December meeting, the future of technology stocks, particularly AI-related stocks, often considered overvalued, is likely to be even more sensitive to interest rate policy. With macroeconomic indicators being released one after another as the year approaches, the simultaneous release of expectations and concerns about the AI industry could increase market volatility, requiring investors to adopt a more cautious approach.
This trend suggests that the AI industry could face repeated "bubble" controversies if its valuation is excessively high relative to its pace of technological development and corporate performance. The market believes that, along with performance-based valuations, the Federal Reserve's policy direction will be key variables influencing technology stock investment trends.
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