A sharp pullback for Nvidia Corp (NASDAQ:NVDA, XETRA:NVD) shares on Thursday caused a case of the collywobbles for twitchy Silicon Valley investors.
It followed a stellar earnings release from the GPU giant on Wednesday, which was initially greeted positively.
But in these odd and irrational times with tech bears are looking for any signs of a puncture to the AI bubble.
What they saw within the entrails of Nvidia's earnings release and follow-up commentary remains moot.
Probably the easy explanation is that Nvidia is the lightning rod for the market's tech anxiety, given it makes much of the hardware that runs large language models such as Claude and ChatGPT.
Anyhoo, sellers were out in force yesterday, doing their best Chicken Little impressions, and the world's most valuable took the brunt of their nervous unease.
Trying to put matters into a rational context, Wedbush argues the latest sell-off is simply a jittery moment in what remains a powerful, decade-long AI investment cycle.
It likens the reaction to January’s so-called DeepSeek moment, when a burst of fear convinced investors that Big Tech had overspent and pushed capital expenditure beyond sustainable levels.
That view proved short-lived. Wedbush notes that hyperscalers are now on track to deploy almost $400 billion of capex this year, far above the $280 billion originally expected.
For the analysts, this confirms the first phase of a multi-year spending supercycle rather than the end of one.
Current market nerves centre on the idea that Nvidia’s customers may be slowing orders or that the industry is quietly signalling fatigue. Wedbush rejects that reading.
It estimates that global investment of between $3 trillion and $4 trillion will flow into AI infrastructure and applications over the next several years as companies race to build the hardware and software needed for an automated, robotics-enabled and AI-driven economy.
To underline the risks of premature skepticism, the analysts point to a long history of investor doubt that later looked misguided. In 2008, many dismissed the iPhone as a one-off novelty in a market dominated by BlackBerry.
In 2007, Netflix was derided for pursuing streaming. Microsoft’s cloud pivot under Satya Nadella was doubted for years. Early cybersecurity challengers such as Zscaler and CrowdStrike were waved away in favour of incumbents.
Nvidia itself was criticized for its early AI R&D push, just as Microsoft was criticized for investing $10 billion in OpenAI in 2023, a stake Wedbush now values at roughly $135 billion.
For the firm, these examples illustrate a familiar pattern of underestimating the scale of technological transitions. It believes the AI boom is still in its early stages, with the market currently navigating a nervous, white-knuckle stretch that often appears in the middle of transformational cycles.
Wedbush maintains that the winners of the AI era should be bought during such volatility. Its preferred names include Nvidia, Microsoft, Oracle, Google, Palantir, Tesla, Apple, CrowdStrike, Palo Alto Networks and Amazon.
The broker views 2026 and beyond as the period when the next leg of AI-driven growth becomes visible, and sees the present pullback as an opportunity rather than a warning signal.