Market Musings 8/25/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Is theĀ #AIĀ bubble popping?Ā Nvidia’s earnings is the next test…
Is the #AI bubble popping? Itās been the all over the headlines the past couple of weeks, but is it just clickbait or are we finally seeing cracks?
Nvidiaās earnings Wednesday will likely be a read on that. Markets will be closely watching for a counterpoint to the pessimistic #AI narrative the past couple of weeks.
So, whatās the worry?
First, a recent MIT study found nearly 95% of generative #AI projects deliver no real business value. Thatās sparked a wave of headlines calling out #AI hype thatās ahead of actual adoption and usefulness.
Second, OpenAIās latest GPT-5 rollout hasnāt impressed. Some are even wondering if weāre already hitting the limits of #AI large language models. While we still think actual #AI is in its infancy, LLMs are just probability models and we do agree that their applications may be overhyped.
Finally, Nvidiaās H20 #AI chip rollout for China may have just hit a wall before it got to launch. Reports are saying Beijing told firms to halt H20 orders after political tensions forcing Nvidia to pause production.
Why focus on Nvidia earnings? Well, theyāre the poster child for #AI right now and expectations have and remain sky-high.
While we donāt doubt Nvidia delivers another blockbuster quarter, investor focus will be on its outlook to squash doubts about #AI monetization, geopolitics and tech ceilings. Obviously anything can happen, but we believe there may more downside risk than upside here.
In any case, itāll be a litmus test for the #AI trade. Weāll have more after Nvidia reports aftermarket on Wednesday.
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As of the publish date, Ursa portfolios may own NVDA.Ā The stocks mentioned in this article may cease to be owned by Ursa portfolios at any point.
The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursaās full disclosures here.
Original Photo by Pixabay.