The chip maker’s stock plunged after reports about the Chinese artificial-intelligence model raised fears about spending on AI infrastructure.

Nvidia, the chip giant at the heart of the artificial intelligence (AI) boom, said business remained strong, despite fears of a bubble stirred by the launch of Chinese AI firm DeepSeek's launch on the scene last month.

Nvidia's forecast also helps allay doubts around a slowdown in spending on its hardware that emerged last month. The company reported quarterly results on Wednesday.

The report raised fears about the sustainability of AI infrastructure growth. That could mean less demand for Nvidia’s chips. TD Cowen’s Michael Elias said his team’s finding points to “a potential oversupply position” for Microsoft. Shares of Nvidia fell 4% on Friday.

Recent data shows that stock pickers are holding their smallest share of megacap names since the global financial crisis, and have found that the strategy is helping their performance. And that means that, while Nvidia’s earnings report was good, it is unlikely to reignite the Magnificent Seven.