SoftBank’s Nvidia Exit Sends Shockwaves Through AI Sector

In a stunning move just one week before Nvidia's highly anticipated quarterly earnings report, Japanese investment giant SoftBank Group has liquidated its entire stake in the chipmaker. The massive divestment, totaling 32.1 million shares sold throughout October, generated approximately $5.8 billion for the technology conglomerate.

This strategic withdrawal by one of technology's most influential investors has ignited intense debate about whether this signals diminishing confidence in the artificial intelligence boom or represents prudent portfolio management ahead of potential market shifts.

The disclosure made official on Tuesday, November 12, triggered immediate market repercussions. Nvidia shares declined more than 3% following the announcement, extending losses that have accumulated to roughly 12% throughout the current month.

SoftBank's official explanation positions the move as capital reallocation rather than retreat. The conglomerate indicated proceeds would fund alternative AI investments, including potential stakes in OpenAI and the ambitious $500 billion Stargate data center initiative.

Bubble Concerns Intensify

The timing and scale of SoftBank's exit have amplified existing concerns about potential overvaluation within the AI sector. These anxieties were further fueled by recent revelations that prominent investor Michael Burry established a substantial short position against Nvidia in late September.

Market observers note that Nvidia now faces dual challenges: meeting exceptionally high earnings expectations while simultaneously convincing investors that demand for its AI processors represents sustainable long-term growth rather than temporary euphoria. The company's premium valuation depends heavily on this narrative of enduring demand.

Should investors sell immediately? Or is it worth buying Nvidia?

Analytical Support Persists

Despite the bearish signals from high-profile investors, several Wall Street institutions maintain optimistic outlooks. Multiple respected analysts reaffirmed buy recommendations this week, with TD Cowen and Citi both reiterating positive ratings.

Citi projected revenue expectations of $56.8 billion, notably exceeding consensus estimates. Bank of America maintained its bullish stance, emphasizing Nvidia's dominant positioning within both healthcare AI applications and the broader artificial intelligence ecosystem.

All attention now turns to the quarterly report scheduled for Wednesday, November 19. Market experts anticipate revenue of approximately $54.6 billion with earnings per share around $1.23. Particular focus will center on the datacenter segment, which expanded 55% last quarter, and gross margins projected in the mid-70% range.

The Critical Test Ahead

Next week's earnings release represents a pivotal moment for Nvidia's market narrative. Beyond the quarterly figures themselves, investor attention will concentrate heavily on forward guidance and management commentary.

The central question remains whether hyperscale cloud providers—Microsoft, Amazon, and Google—can sustain explosive demand for Nvidia's Blackwell GPUs. Alternatively, SoftBank's departure might represent prescient capital reallocation by sophisticated investors identifying peak valuation.

The coming days will determine whether Nvidia can validate its AI leadership position and reassure markets, or whether SoftBank's dramatic exit foreshadows broader sector recalibration.