Nvidia's earnings report dispels the shadow of the AI bubble: tech stocks rebound across the board, is a Fed rate cut in December off the table?

On November 20, 2025, Nvidia's better-than-expected earnings report ignited a global risk asset Rebound, with its after-hours stock price soaring 5.7% to $197.6, driving the Nasdaq 100 index futures up 1.7% and the S&P 500 futures rising 1.2%.

The Asian markets responded in sync, with the Nikkei 225 index soaring 3.7%, the Korean Kospi index rising 2.5%, and Bitcoin returning above $92,000. This earnings report alleviated concerns about the sustainability of AI spending, but uncertainties regarding the Fed's interest rate path and employment data still constrain the height of the Rebound.

NVIDIA's Performance Becomes a Market Turning Point: AI Narrative Regains Momentum

NVIDIA's revenue for the third quarter of fiscal year 2026 was $57.006 billion, a year-on-year increase of 62%, with a net profit of $31.91 billion, significantly exceeding Wall Street's expectations. More importantly, the company provided guidance for fourth quarter revenue at $65 billion, which is 5.4% higher than the market consensus of $61.66 billion, proving that AI demand has not shown signs of weakening. CEO Jensen Huang emphasized in a statement that “computing demand continues to accelerate, AI is everywhere and handling all tasks at the same time,” and this optimistic outlook directly offsets recent concerns about valuation bubbles in tech stocks.

After the earnings report was released, not only did Nvidia's stock price soar, but Alphabet also rose 4% due to positive reviews of the new Gemini AI model, while AI concept stocks like AMD and Microsoft strengthened simultaneously. Matthew Haupt, a portfolio manager at Wilson Asset Management, commented: “This earnings report became a circuit breaker for the stock market decline - when sentiment turned south, they delivered great results.”

The Complexity of the Macroeconomic Background: Challenges of Interest Rate Path and Data Vacuum

Despite the strong Rebound in tech stocks, there are still concerns about the macro environment. The minutes from the Federal Reserve's October meeting indicate that most officials believe it is appropriate to keep interest rates stable until the end of 2025, which diverges from the market's expectation of a rate cut in December. Complicating matters further, the U.S. Bureau of Labor Statistics has decided not to release the October employment report separately, but rather to combine it with the November data (to be released after the Federal Reserve's December meeting), leaving policymakers without key economic indicators for reference before the year-end meeting.

Currently, the pricing for a rate cut in December in the interest rate futures market has basically faded, with the benchmark rate likely to remain in the range of 3.75%-4%. IG Markets strategist Tony Sycamore pointed out: “The information vacuum has amplified the internal decision-making differences within the Federal Reserve, which may drive them to choose to stand pat at the December FOMC meeting.” This uncertainty caused the 10-year U.S. Treasury yield to rise by 1 basis point to 4.15%.

Summary of the global market reaction to Nvidia's earnings report

• Nasdaq 100 Futures: +1.7%
• S&P 500 Futures: +1.2%
• Nikkei 225 Index: +3.7%
• Korea Kospi Index: +2.5%
• Bitcoin Price: Breakthrough 92000 USD
• Dollar Index: Maintains the largest rise since the end of September

Global Market Linkage: Risk Appetite Transmission from US Stocks to Cryptocurrencies

The ripple effect of Nvidia's financial report highlights the increased correlation of global risk assets. During the Asian trading session, the indices of Japan and South Korea, two key markets in the AI supply chain, led the world with rises of 6.2% and 4.8%, respectively, for Tokyo Electron and Samsung Electronics. The cryptocurrency market also benefited from improved sentiment, with Bitcoin rebounding from a low of 88522 dollars to above 92000 dollars, and Ethereum returning to the 3100 dollar mark.

This linkage stems from the similar financial attributes shared by AI and cryptocurrencies—both are viewed as disruptive bets against traditional economic systems and are highly sensitive to liquidity changes. However, Wall Street executives remain cautious, with Goldman Sachs President John Waldron warning that “the technical outlook favors more protection and downside risk,” while Bob Diamond of Atlas Merchant Capital described the recent volatility as a “healthy correction.”

Industry Landscape Restructuring: AI Investment Shifts from Hardware to Application Layer

NVIDIA's financial report reflects profound changes in the AI industry landscape. Current demand is no longer limited to training chips; inference computing power, edge AI, and industry-customized solutions are becoming new growth points. Among the company's data center business revenue of $51.2 billion, about $8.2 billion comes from network business (InfiniBand and Spectrum-X switches), reflecting that large-scale AI cluster construction has entered a period of rapid growth.

At the same time, the diversification of the customer structure has made significant progress—besides large-scale cloud vendors, the procurement share of the automotive, biotechnology, and financial services industries has risen to 28%. This trend has prompted investors to shift from a pure hardware mindset to an ecological layout, with a focus on rebalancing between chip suppliers, model developers, and vertical application providers.

Has the AI bubble debate come to an end?

NVIDIA's strong performance has temporarily quelled the “AI bubble theory,” but the core issue remains unresolved: Does current AI investment generate sufficient economic returns? Despite Jensen Huang citing the enormous target of a “$3-4 trillion AI infrastructure market” annually, the limitations of corporate IT budgets and the difficulty of calculating AI project ROI remain potential constraints. Historical experience shows that the early stages of technological revolutions are often accompanied by over-investment in infrastructure, such as the fiber optic network construction boom in 2000. The difference now is that current AI applications have penetrated production processes such as drug discovery and climate prediction, which may shorten the value realization cycle. For investors, it is necessary to identify companies that truly possess technological barriers and cash flow, rather than simply chasing AI concept labels.

FAQ

1. How long will Nvidia's earnings report impact tech stocks?

Short-term sentiment boost may last for 1-2 weeks, but the long-term trend still depends on interest rate policy and the realization of corporate earnings.

2. Why is the response to Nvidia's data stronger in the Asian market?

Japanese, Korean, and Taiwanese companies are deeply involved in the AI hardware supply chain, and NVIDIA's demand is directly related to its order visibility.

3. Will the correlation between Bitcoin and tech stocks continue to strengthen?

During the phase of delayed interest rate cut expectations, it may remain highly correlated, but the Bitcoin halving cycle and unique factors related to institutional adoption may trigger a decoupling.

4. How can ordinary investors participate in the AI sector rebound?

You can pay attention to Nvidia, the three giants of cloud computing (Microsoft, Google, Amazon), and semiconductor equipment stocks, but you need to control your positions to prevent fluctuations.

5. Will the Federal Reserve's data blackout period increase market volatility?

It is possible that investors rely on fragmented information for decision-making, but the financial reports of companies like Nvidia may serve as alternative economic indicators.