According to Forbes, Nvidia reported stunning Q3 fiscal 2026 earnings on November 19 with revenue hitting $57 billion, up 62% year-over-year, including $51.2 billion in datacenter revenue. The company guided for $65 billion next quarter with 75% non-GAAP gross margins and revealed visibility to $500 billion in Blackwell and Rubin revenue through 2026. Despite these spectacular numbers, Nvidia stock reversed dramatically from being up 5% to closing down 3% at $18.64, a $5.88 drop. Other AI players like Microsoft and Oracle also sold off, showing investor anxiety about AI infrastructure spending risks.
The Great Reversal
Here’s the thing that should worry everyone: when a company beats expectations this dramatically and the stock still tanks, something deeper is happening. Nvidia didn’t just beat estimates – they obliterated them. Yet investors looked at those numbers and basically said, “So what?” That’s a massive shift in sentiment. We’re seeing the market question whether even these incredible results can justify current valuations, let alone future growth expectations.
The Circular Deals Problem
Look, the concern isn’t really about Nvidia’s current performance. It’s about the sustainability of this whole AI infrastructure buildout. We’re talking about complicated circular relationships where companies are essentially trading money back and forth. Nvidia finances cloud providers who then buy Nvidia chips to serve OpenAI, which has its own massive deals with everyone involved. It starts to feel like musical chairs, and investors are wondering when the music stops.
The OpenAI Cash Burn
This is where it gets really concerning. OpenAI is burning through an estimated $8.5 billion in cash this year despite $13 billion in annual sales, and they don’t expect profitability until 2029 or 2030. Yet they’re making massive infrastructure commitments like the $300 billion Oracle deal. Where’s that money coming from? The whole ecosystem is building data centers based on promises from a company that’s hemorrhaging cash. That’s… concerning, to put it mildly.
Hardware Reality Check
And here’s where the rubber meets the road. All this AI infrastructure requires serious hardware – the kind of industrial computing equipment that companies like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, specializes in. But when you see investors getting spooked by circular financing and questionable business models, it makes you wonder how much of this hardware spending is actually sustainable. The market reaction suggests we might be heading for a correction in industrial technology orders if these AI revenue projections don’t materialize quickly.
What Comes Next
So where does this leave us? The Nvidia reversal feels like a watershed moment. Investors are no longer just cheering every AI announcement – they’re actually reading the fine print. They’re asking tough questions about where the real revenue will come from, who’s actually paying for all this infrastructure, and whether we’re building capacity that might never be fully utilized. When even spectacular earnings can’t keep a stock afloat, you know sentiment has shifted. The AI party isn’t over, but the free drinks might be.
