The report raised fears about the sustainability of AI infrastructure growth. That could mean less demand for Nvidia’s chips. TD Cowen’s Michael Elias said his team’s finding points to “a potential oversupply position” for Microsoft. Shares of Nvidia fell 4% on Friday.

Recent data shows that stock pickers are holding their smallest share of megacap names since the global financial crisis, and have found that the strategy is helping their performance. And that means that, while Nvidia’s earnings report was good, it is unlikely to reignite the Magnificent Seven.

This is Nvidia’s first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S.

Alibaba, ByteDance, and Tencent are driving demand for NVIDIA H20 chips, fueling China’s AI boom despite U.S. export restrictions.

Nvidia, the chip giant at the heart of the artificial intelligence (AI) boom, said business remained strong, despite fears of a bubble stirred by the launch of Chinese AI firm DeepSeek's launch on the scene last month.

Nvidia's NVDA.O strong growth forecast for the first quarter on Wednesday signaled that booming demand for its artificial intelligence chips was intact, and the company said orders for its new Blackwell semiconductors were "amazing.