Is the Nvidia Bubble Back?

The rapid rise of artificial intelligence has placed Nvidia at the core of global markets, turning its chips into critical infrastructure for the AI economy. As a result, its valuation has become highly sensitive to any development that challenges the assumption that AI progress requires ever-increasing hardware demand.

That assumption was tested by recent breakthroughs from DeepSeek, which demonstrated that frontier-level AI performance could be achieved with far lower compute and memory requirements. Rather than destroying demand for AI hardware, these advances have introduced a more nuanced risk: pressure on margins, pricing power, and long-term dependence on high-end GPUs.

Markets reacted swiftly, with Nvidia suffering its largest single-day decline on record as investors reassessed future growth assumptions. However, history suggests that such efficiency shocks tend to lead to repricing rather than lasting panic. Training cutting-edge AI models still relies heavily on advanced hardware, but inference optimisation and geopolitical constraints are accelerating the development of alternatives, particularly in China.

Read more on how AI efficiency breakthroughs, geopolitics, and shifting expectations are reshaping Nvidia’s valuation and driving volatility across global markets.