JUANA SUMMERS, HOST:
The stock market has been skyrocketing this year, thanks in large part to tech and the booming AI industry. This afternoon, the tech company Nvidia delivered its latest financial results. It told investors that it made another $32 billion in the last three months. But are these gangbuster results something to cheer or fear? And is this massive AI bubble about to burst? NPR finance correspondent Maria Aspan has been covering this, and she's with us now, hey.
MARIA ASPAN, BYLINE: Hey, Juana.
SUMMERS: So, Maria, let's just start with Nvidia. Why is this one company at the center of all of this?
ASPAN: This one company is the most valuable company in the world. Last month, it became the first ever company to be worth $5 trillion. Now, it got that way by selling the semiconductors that are powering the AI boom, and it is making gobs of money from that. But as you alluded to, the frenzy over AI has become this double-edged sword.
SUMMERS: OK, help me understand this. Tell us more about why this frenzy is concerning.
ASPAN: Well, at scale, we're just not seeing a lot of these AI investments pay off yet. And that's a problem because tech companies in general, and Nvidia in particular, have a huge influence on how the overall stock market is doing. So we've seen investors start to get really jittery over the last few days. Some of the biggest tech stocks have been selling off. And the S&P 500 in particular is coming off its worst losing streak since August.
SUMMERS: I mean, people have been worried about an AI bubble for years, as you've reported and we've talked about. So what is different now?
ASPAN: Right. Well, as we've talked about, Nvidia's earnings reports have become this huge deal every three months. This one is coming at a time when we've seen warnings from top investors, including the heads of Goldman Sachs and Morgan Stanley. They're warning that tech stocks are too hot and the market is due for a correction. And now Silicon Valley leaders are also sounding the alarm, like Sundar Pichai. He's the CEO of Google parent company Alphabet, which we should note is a financial supporter of NPR. In an interview with the BBC this week, Pichai was surprisingly candid.
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SUNDAR PICHAI: I think it's both rational and there are elements of irrationality through a moment like this.
ASPAN: Elements of irrationality. He also acknowledged that sometimes the tech industry overshoots in investment cycles.
SUMMERS: Which is pretty notable to hear from Google, I have to say. How do investors respond?
ASPAN: So I talked today to Pam Hegarty. She's a tech investor and lead portfolio manager at BNP Paribas. And she told me that it's normal to have these periods of ups and downs as the markets adjust to a new technology.
PAM HEGARTY: I think the worst that could happen is in two or three years or longer, there could be a digestion period.
ASPAN: That said, it sounds like we're probably in for some more of these short-term market corrections at least.
SUMMERS: So just help us understand. What does this mean for, like, regular everyday people who do not care about the stock market?
ASPAN: Right. This is my obligatory disclaimer that the stock market is not the economy. But the problem is that the AI boom in the stock market is glossing over a lot of questions about what is going on in the economy. Tariffs are cutting into company profits, consumer prices are going up, the job market is weakening. And tomorrow, we're going to get the long-delayed September jobs report. So AI has been this big bright spot, but it's unclear how long it can last.
SUMMERS: NPR's Maria Aspan. Thank you.
ASPAN: Thank you. Transcript provided by NPR, Copyright NPR.
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