US Stocks Open Mixed as AI Doubts Resurface
Wall Street opened Thursday with a split personality.
The Dow Jones Industrial Average rose about 0.4%, riding momentum from the previous session’s gains. But the tech-heavy Nasdaq Composite slipped roughly 0.4%, and the S&P 500 edged down 0.2%.
At the center of the tension was Nvidia — the company that has come to symbolize the AI boom.
Despite delivering blockbuster earnings, Nvidia failed to impress investors. The result? A drop of more than 2% in early trading and fresh questions about whether the AI rally has gone too far.
Nvidia Delivers Big Numbers — But Not Big Excitement
On paper, Nvidia’s latest results looked strong.
The chip giant posted a 73% surge in fourth-quarter revenue and issued first-quarter guidance that easily topped Wall Street expectations. Earnings per share and revenue both beat consensus estimates.
Its data center business — the engine behind AI infrastructure — brought in the majority of revenue growth.
Yet investors responded with a shrug.
Why?
Analysts say the issue wasn’t the numbers. It was the lack of clarity. Nvidia didn’t provide detailed insight into what’s driving future growth. Its outlook also excluded potential revenue from China, leaving some uncertainty about geopolitical risks and competitive pressures.
Investors are no longer satisfied with explosive growth alone. They want proof that AI spending is sustainable and profitable long term.
As AI valuations soar, skepticism is rising just as fast.
The “AI Scare Trade” Is Back
In recent weeks, markets have been rocked by what traders are calling the AI scare trade.
The concern isn’t just about whether AI companies can keep growing. It’s also about disruption.
AI is threatening legacy software firms, reshaping enterprise budgets, and forcing companies to rethink their entire tech stacks.
Shares of Salesforce fell about 4% in premarket trading after issuing a revenue forecast that came in slightly below expectations. Investors fear that heavy AI investments and slowing enterprise software demand could pressure margins.
CEO Marc Benioff attempted to calm concerns, and the stock briefly rebounded at the open. Still, the broader message is clear: traditional tech companies are being forced to adapt quickly — or risk falling behind.
Meanwhile, Nvidia Eyes a New Battleground
Interestingly, Nvidia’s CEO Jensen Huang is preparing for a renewed battle beyond GPUs.
While Nvidia built its empire on graphics processing units powering AI servers, Huang has been talking more about CPUs — central processing units historically dominated by Intel and Advanced Micro Devices.
As AI shifts from model training to deployment, CPUs may regain importance in data centers. Nvidia has already launched its own data center CPUs and says it is ready to compete aggressively.
This signals a broader evolution in the AI infrastructure race — and potentially new competition dynamics ahead.
Stellantis Stuns With Massive Loss
AI wasn’t the only story shaking markets.
Automaker Stellantis reported a staggering $26.3 billion full-year loss after taking a massive EV-related charge.
While second-half revenue showed some improvement, the headline loss overshadowed any progress. The company cited $29.96 billion in unusual charges tied largely to electric vehicle investments and restructuring.
The results highlight the growing pains facing legacy automakers as they transition to electric vehicles — a shift that requires enormous capital and carries significant risk.
Jobless Claims Point to a Slowing Labor Market
On the macroeconomic front, fresh labor data suggested the economy may be cooling.
Initial jobless claims rose slightly to 212,000 for the week ended Feb. 21, up from 208,000 the prior week. However, the number came in below economists’ expectations of 216,000.
Continuing claims fell modestly to 1.83 million.
The mixed signals paint a picture of a labor market that is neither booming nor collapsing — but possibly stagnating.
Investors are now looking ahead to January’s wholesale inflation reading, which could influence the Federal Reserve’s next interest rate decision.
A softer inflation number may strengthen the case for rate cuts later this year.
Nutanix Soars on Strong Earnings and AMD Deal
While Nvidia stumbled, Nutanix surged more than 15% in premarket trading after reporting strong earnings and announcing a multiyear partnership with Advanced Micro Devices.
AMD plans to invest $250 million in Nutanix shares and joint R&D efforts to build enterprise AI platforms.
The move highlights how companies are positioning themselves to capitalize on agentic AI — systems capable of autonomous decision-making and task execution.
Ironically, AMD shares slipped about 1.5% following the announcement, as Nvidia’s earnings overshadowed broader chip sector enthusiasm.
Investors Are Hedging for a Drop — And That May Be Bullish
Despite market volatility, some strategists see opportunity.
Investors have been piling into downside protection strategies, driving put-call skew to a two-year high. In simple terms, traders are paying up to protect against a potential market drop.
Historically, extreme pessimism can act as a contrarian buy signal.
When sentiment becomes heavily negative, markets sometimes move in the opposite direction.
The S&P 500 has been stuck in a range for months, with investors waiting for a clear breakout — up or down.
Energy Sector Feels Pressure Despite Lower Gas Prices
Meanwhile, the energy sector is experiencing its own paradox.
Gasoline prices have fallen below $3 per gallon nationally, and oil production remains near record highs. But major oil companies like Exxon Mobil and Chevron have reported year-over-year profit declines due to lower crude prices.
An oil glut is squeezing margins, even as production remains strong.
This dynamic underscores how macro forces are reshaping multiple sectors simultaneously — from AI to autos to energy.
The Bigger Question: Is the AI Boom Sustainable?
The central theme tying markets together right now is uncertainty around AI’s long-term payoff.
Nvidia’s explosive growth turned it into one of the world’s most valuable companies. But investors are no longer reacting with blind enthusiasm.
They want answers to tough questions:
- Can AI demand remain elevated?
- Are companies generating real returns from AI investments?
- Will competition erode margins?
- Is there a bubble forming?
Nvidia’s CEO insists customers are already seeing strong returns and will continue investing heavily in compute power.
But Wall Street wants more than confidence. It wants proof.
What Comes Next?
Markets are entering a pivotal phase.
Earnings remain strong in many sectors, but sentiment is fragile. Economic data suggests moderation rather than acceleration. AI remains both a massive opportunity and a source of disruption.
If inflation cools and the Federal Reserve signals rate cuts, stocks could find renewed momentum.
If AI spending slows or competitive pressures intensify, tech valuations may face further scrutiny.
For now, Wall Street is juggling optimism and anxiety — and Nvidia’s lukewarm reception shows just how high the bar has become in the AI era.
Big numbers alone are no longer enough.
