AI and Nvidia have been bright spots in an uncertain economy, but there are doubts now

An artificial-intelligence bubble has been supporting the stock market and broader economy, raising questions about consequences if it collapses. Big Tech faces unprecedented political pressure from the White House alongside doubts about heavy AI investment flows. Nvidia reported blockbuster results that beat expectations, yet its stock fell about 4% in the two days after the report. Nvidia accounts for roughly 8% of the S&P 500, and several major tech firms are investing billions in AI development. The S&P 500 and Nasdaq have risen notably this year despite economic uncertainty and potential tariff-driven price increases. Most companies experimenting with AI have not yet generated revenue from those efforts.

The artificial-intelligence bubble has been propping up the stock market and the broader economy for a while now. What happens if it bursts? That's been the question circling Wall Street recently, as Big Tech companies face both unprecedented political pressures from the White House and new doubts about all the money that's pouring into AI investments. This past week, AI darling Nvidia reported blockbuster financial results that beat analysts' expectations.

Nvidia is still the world's most valuable company, and it alone makes up about 8% of the S&P 500. It and the other so-called "Magnificent Seven" tech companies are contributing both to real economic growth by investing billions and billions of dollars in developing artificial intelligence and to the stock markets that Americans rely on for their retirement investments and other savings. The S&P 500 is up almost 10% and the tech-heavy Nasdaq is up over 11% since the start of the year.

In this modern-day gold rush, Nvidia and its competitors are selling the picks and shovels: the semiconductors that many tech companies are using to develop AI systems and capabilities. Those companies, in turn, are selling their AI products to all the non-tech companies that are prospecting for gold that is, looking for ways that AI can make their operations cheaper or more efficient.

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