Nvidia Shares Tumble on AI Bubble Fears

New Zealand's electricity regulator has implemented rule changes designed to enhance water access for hydro generators during dry periods. These changes, effective before winter this year, aim to improve water management as approximately 60% of the country's electricity is hydro-generated. In response to drought and gas shortages in 2024, which previously drove up power costs, these updated policies will allow for greater water release before critical lake levels are reached.

Separately, Nvidia's stock saw its most significant drop in ten months, declining 5.5% after its first-quarter sales forecast failed to fully alleviate concerns about an artificial intelligence bubble. Despite reporting a 73% surge in fourth-quarter revenue and beating analyst estimates, investors remain cautious about the long-term sustainability of AI spending. Questions persist regarding Nvidia's future dominance as AI technology evolves from model training to everyday task execution.

Nvidia's CEO, Jensen Huang, expressed confidence that growing customer cash flows will sustain elevated investment levels. However, concerns have been raised about significant purchase obligations. The company's chief financial officer assured that supply commitments are in place to meet future demand, including shipments extending into calendar 2027. The company still faces uncertainty in the Chinese market, impacting its forecasts for that region.