Nvidia, the world's most valuable chipmaker, has done it again. The company reported blockbuster fiscal third-quarter earnings on Wednesday, with revenue soaring to a record $96.2 billion and profits more than doubling to $59.7 billion. It also issued a stunning forecast of $108 billion in revenue for the current quarter, which would make it one of the few companies in history to rake in over $100 billion in a single three-month period—joining Amazon, Apple, and Alphabet.

The results, which blew past Wall Street's expectations of around $92 billion, underscore Nvidia's central role in the artificial intelligence revolution. Its data center business, which supplies the AI chips powering everything from OpenAI's ChatGPT to corporate cloud services, brought in a record $89 billion, more than double what it generated a year earlier. The company's market valuation has surged past $4 trillion, a first for any public company, according to NBC News.

A 'Generational Opportunity' or a House of Cards?

Yet despite the eye-popping numbers, Nvidia's stock struggled in after-hours trading, and a chorus of analysts and commentators are asking whether the AI boom is overheating. The concern centers on a growing web of circular deals, in which Nvidia invests in AI startups, and those startups use Nvidia's chips and cloud credits, often funded by Nvidia's own money, to drive demand.

Jensen Huang, Nvidia's CEO, recently said that a $30 billion investment in OpenAI might be the company's last. But just weeks later, Nvidia guaranteed up to $105 billion of OpenAI's leases in a deal that experts say entangles the two companies even further. “How much of the AI boom is just Nvidia's cash being recycled?” asks a headline from Yahoo Finance, echoing a question now circulating in financial circles.

“The AI industry is lying to you,” writes Ed Zitron in a widely shared essay, arguing that the revenue reported by AI companies is often subsidized by chip purchases or capital from Nvidia itself. “OpenAI is spending $3.30 to make $1.00 while Google pays nothing,” notes another analysis, pointing to a thermodynamic reckoning that may be approaching.

Circular Deals and the 'Ouroboros' of AI

NBC News reported that the AI boom's reliance on circular deals is raising fears of a bubble. Some experts call it the “Ouroboros” — a snake eating its own tail. Nvidia's investments in startups like OpenAI, plus its guarantees of their leases, create a self-reinforcing loop: Nvidia books revenue from these companies, they buy Nvidia chips, and Nvidia's market cap grows, allowing it to invest more.

But this cycle may be fragile. Yale Insights published an analysis titled “This Is How the AI Bubble Bursts,” arguing that if AI spending slows or fails to generate real returns, the whole ecosystem could collapse. The WSJ, meanwhile, highlighted a “quarter-trillion-dollar onslaught of AI bonds” that is testing investors' limits, as companies like OpenAI and Microsoft pile on debt to fund AI infrastructure.

Geopolitics and the Race for Chips

Nvidia's dominance is also drawing geopolitical scrutiny. The company is boosting spending in Taiwan to $150 billion a year, according to The Malaysian Reserve, while TSMC — Nvidia's key manufacturing partner — has pledged another $100 billion to expand U.S. production in Arizona, as reported by BBC. These investments are part of a broader effort to secure supply chains amid U.S.-China tensions.

Trade restrictions could also unlock new revenue. Share Talk noted that Nvidia could generate billions more if the U.S. approves exports of its H200 chips to China. The company is reportedly working on a version that complies with export controls, but a decision remains pending.

Despite the pressures, Nvidia's existing backlog is enormous. Ad-hoc-news reported a $119 billion backlog, and even after a seven-day slump, the company's stock valuations are at their cheapest in years, according to Ynetnews. That has some value investors intrigued.

What's Next for Investors?

Nvidia's board also announced a quarterly dividend, with payments beginning in June, as Finbold detailed. For holders of 100 shares, that means a payout of $10 (based on the current rate). While modest, it signals confidence in sustained cash flow.

Meanwhile, OpenAI raised $122 billion in a new funding round, according to its own announcement, further cementing the AI race's momentum. But the question remains: can these companies justify the massive capital outlays?

A Tale of Two Narratives

Nvidia's earnings are a study in contrasts. On one hand, the numbers are staggering. “The A.I. boom has found another gear,” writes The New York Times, noting that Nvidia's profit hit $58.3 billion — the exact figure varies slightly across sources, with some citing $59.7 billion, likely due to accounting adjustments.

Yet the same outlets warn: “Why can’t people shake their worries?” The Guardian notes that Nvidia beat expectations in its first earnings after DeepSeek's AI debut, a potential disruptor. And Il Sole 24 Ore reports that annual profit jumped to $117 billion, but even that couldn't fully satisfy a market that has grown accustomed to miracles.

As Nvidia prepares to cross the $100 billion quarterly revenue threshold, the company is entering uncharted territory. Its own CEO calls this the start of a “new industrial revolution.” But to many, the froth in the AI market resembles the dot-com era — immense promise, but also profound risk.