Nvidia Falls 30% as AI Investors Reassess Valuations and Growth

Investor sentiment towards artificial intelligence stocks is becoming increasingly divided, with Nvidia shares falling sharply from their record high even as demand for Anthropic’s planned IPO remains strong. Michael Burry has increased bearish positions against the Nasdaq 100 and semiconductor stocks, while billionaire Nvidia investor Leo KoGuan has publicly backed Jensen Huang.

At the broader market level, Bank of America reports record inflows into global equity funds but remains cautious about the sustainability of current risk appetite. The developments highlight the growing debate around AI valuations, earnings expectations and the scale of future technology investment.

Nvidia Faces Selling Pressure as Investors Reassess AI Exposure

Nvidia shares have fallen more than 30% from their all-time high recorded on October 6, with the stock declining more than 4% in one reported session and losing approximately 11% during the week.

The sell-off has been linked to leadership uncertainty, concerns about future AI infrastructure spending and questions about how long current levels of investment can be sustained. Reports have also raised concerns about regulatory scrutiny involving Nvidia.

Nvidia’s forward price-to-earnings ratio was reported at around 12, its lowest level since 2012. However, analysts continue to expect strong earnings growth, with October-quarter revenue forecast to increase approximately 92% year-on-year and net profit expected to exceed $60 billion.

Billionaire investor Leo KoGuan publicly backed Jensen Huang, saying he would not invest further in Nvidia if the company changed leadership. KoGuan said he had invested approximately $1.3 billion in Nvidia, although the exact size of his current holdings could not be independently verified.

Meanwhile, Michael Burry said he had doubled his Nasdaq 100 put position and increased bearish exposure to semiconductor stocks. He also repurchased part of a previously reduced put position in the VanEck Semiconductor ETF, arguing that semiconductor valuations could decline further and earnings across its holdings could weaken.

Burry’s positioning reflects his concerns about valuations and the future earnings outlook. It does not establish that a wider semiconductor downturn is inevitable.

Anthropic IPO Demand Contrasts With Growing AI Market Caution

Anthropic’s planned initial public offering has attracted orders worth approximately six times the shares available, according to Bloomberg. The Claude developer and existing shareholders plan to raise up to $64.4 billion through an offering of 825 million shares at $70–$78 each.

A separate private placement of up to $26 billion could take the combined fundraising to approximately $90.4 billion. The company is targeting a fully diluted valuation of around $1.4 trillion, with final IPO pricing expected on November 18 and a planned Nasdaq debut on November 19.

Anthropic’s reported revenue reached $33.2 billion in the first nine months of 2026, compared with $2.5 billion in the same period a year earlier. Its annualised revenue run rate reached $81 billion at the end of October.

The strong demand for Anthropic’s offering comes alongside signs of caution elsewhere in the market. Bank of America strategists led by Michael Hartnett estimate that global equity funds have attracted annualised inflows of $1.4 trillion this year. US equity funds received $656 billion, technology funds $222 billion and South Korean equity funds $78 billion.

BofA said these inflows support equity markets but noted that relatively few investors are taking meaningful short positions or underweighting equities despite bearish sentiment. The bank remains defensive until rate hikes end and financial conditions ease.

It identified three conditions that could support a more constructive outlook: US crude oil falling below $70 per barrel, the dollar reversing its recent gains and the 10-year US Treasury yield declining below 4.5%.

Goldman Sachs separately expects the 10-year US Treasury yield to fall to 4.6% by the end of 2027, citing attractive Treasury valuations, moderating inflation and demand for bonds as portfolio hedges.

Together, the developments show a market that continues to attract substantial capital but is becoming more selective about valuations, leadership, earnings and the long-term returns from AI infrastructure spending.