Jasmine Birtles
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Is the AI Bubble Still Relevant? What Investors Need to Know
Ruby Layram
20th Nov 2025
The chatter in markets these days is loud: “AI is overheated. Aren’t we in a bubble?” With the blistering valuation multiples around companies like Nvidia, it’s a fair question.
But after Nvidia’s latest results and a close look at its business model, it’s not obvious that we’re on a knife-edge waiting for a crash. In fact, for long-term investors, the AI boom may be more sustainable, and grounded than many fear.
Here’s why the “AI bubble” narrative may be an exaggeration and what long-term investors should keep in mind.
Nvidia’s Recent Earnings Speak Volumes
Nvidia’s Q3 fiscal 2026 results were nothing short of remarkable: $57 billion in revenue, up 62% year-over-year, with data-center revenue at $51.2 billion.
CEO Jensen Huang said Blackwell chip demand is “off the charts” and that cloud GPUs are sold out. Nvidia projected Q4 revenue to reach $65 billion, showing they’re expecting continued strong demand.
These aren’t just good numbers. They suggest that Nvidia is not only riding the AI wave, it’s helping build it, and demand is not fading anytime soon.
It’s Not Just Hype. There’s Real Infrastructure Demand
A bubble implies speculation without substance. But the AI industry today is anything but flimsy.
Its foundations are being poured into physical infrastructure, breakthrough architectures, and real-world enterprise adoption at a speed we haven’t seen since the early internet.
Across the ecosystem, data-center spending is surging as cloud providers, corporations, governments, and startups race to secure more compute.
This isn’t hype-driven buying. It’s a response to genuine demand for training and running increasingly powerful models.
And crucially, the growth isn’t isolated to a single segment. Pretty much every industry is being reshaped by AI, driving additional layers of demand.
Companies across various sectors are integrating AI into products, operations, and services in ways that create long-term, recurring need for compute and software.
The Value Isn’t Just in Speculation. Companies Like Nvidia Have a ‘Moat’
Here’s what gives me confidence in AI stocks as a long-term investor. These companies aren’t just selling chips. They are creating rich ecosystems with various layers and product offerings. This means that performance isn’t reliant on one product
These are not short-term hype plays but structural bets on the future of compute.
Here’s What Investors Should Focus On…
To navigate this “AI bubble” debate wisely, here are the key points long-term investors should keep front of mind:
- Focus on demand, not speculation. Is demand for compute actually slowing? So far, the numbers say no.
- Understand the multi-layer nature of AI. It’s not just about chips. Software, data centers, and cross-industry adoption matter.
- Avoid timing based on fear. Trying to jump in and out of “AI” is risky. A well-constructed long-term allocation makes more sense.
- Pay attention to execution. Revenue growth, margin stability, and infrastructure orders are more meaningful than social media talk.
- Keep your portfolio balanced. Even if you love Nvidia, don’t put everything in it. Diversify within AI and across themes.
Final Thought: The AI Boom Isn’t Just a Bubble, It’s a Foundation
Yes, the markets are exuberant. Yes, Nvidia’s valuation is sky-high. But underlying that is a real, tangible, and scalable business that’s powering the future of compute.
For long-term investors, the AI bubble narrative feels a bit too simplistic, and probably a little misplaced.
If you believe in AI’s long-term transformative power, in everything from healthcare to robotics to cloud, then companies like Nvidia aren’t just part of a bubble. They’re laying the foundation.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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