Nvidia's Results Stress-Test AI Hardware Sector Confidence

Despite Nvidia posting a monumental $120 billion in annual profit, the market's anxious reaction underscores a critical inflection point. This isn't about one company; it's a stress test for the entire AI hardware sector, treating the chip titan as a bellwether for the market's faith in sustained, long-term AI investment. The "AI scare trade" signals that even unprecedented financial performance is no longer enough to insulate firms from broader macroeconomic anxieties and questions about growth ceilings. This market skepticism puts immense pressure not just on Nvidia to justify its colossal valuation, but on the entire venture-backed AI ecosystem. The ripple effect threatens startups and software developers who depend on a perception of limitless growth to secure funding and partnerships. This dynamic raises critical questions about whether the software and services layer of the AI stack can deliver on the enormous promise currently priced into the hardware, setting the stage for a potential market reckoning.