Nvidia set to report earnings as AI bubble fears loom
Nvidia’s logo is displayed at their headquarters on Aug. 26, 2026, in Santa Clara, California. Nvidia’s second-quarter earnings are expected to be released after markets close on Wednesday. (Benjamin Fanjoy/Getty Images)
(NEW YORK) — Nvidia is set to report earnings on Wednesday as a data center boom drives demand for the company’s advanced artificial intelligence chips, despite political backlash and looming concern about a financial bubble.
In recent years, the California-based behemoth has defied skeptics with blockbuster revenue quarter after quarter.
Rip-roaring growth transformed Nvidia from an ascendant AI player into the world’s most valuable company. Investors will be eager to see whether the firm continued to deliver staggering revenue gains over the three months ending in July.
The results hold implications well beyond Nvidia. Many analysts view the company as a bellwether for the stock market and the overall economy, which have both come to rely in part on massive spending on AI.
Nvidia is expected to report second quarter revenue of $92 billion, which would amount to a 96% jump from the same period a year earlier, Bloomberg estimates showed.
As big-tech names spend hundreds of billions on chips and data centers necessary for the energy-intensive technology, however, the financial benefits remain uncertain.
The earnings reported by Nvidia will gauge demand for a key building block of AI, showing whether appetite for the technology remains at a fever pitch.
Before the earnings report, Karan Girotra, a professor of operations, technology and innovation at Cornell Tech, said investors would watch whether the company has retained its dominance in chip manufacturing.
As opposed to the highly competitive markets for AI models and enterprise products, the chip sector has given way to a clear winner.
Nvidia “does not face a serious challenger at its layer of the stack and is probably the best chance for public market investors to profit from the AI boom,” Girotra said.
Fears of an AI bubble persisted ahead of Nvidia’s previous earnings report, but the company rebuked naysayers. Nvidia recorded $81.6 billion in sales over three months ending in April, which beat analyst expectations of $79.2 billion. The jump in revenue marked 85% growth compared to the same quarter a year earlier.
Despite Nvidia’s continued expansion, investors have proven jittery in recent months. Shares have climbed 13% so far this year after soaring nearly 39% in 2025.
The company boasts a market cap of $5.1 trillion, making it roughly equivalent to the GDP of Japan or Germany. Nvidia expanded at a breakneck pace after an AI craze set off by the release of OpenAI’s ChatGPT in 2022, soaring nearly 700% over the ensuing two years.
Elon Musk arrives to court for his lawsuit against OpenAI at the Ronald V. Dellums Federal Building on April 28, 2026 in Oakland, California. (Benjamin Fanjoy/Getty Images)
(OAKLAND, Calif.) — Billionaire entrepreneur Elon Musk and prominent AI executive Sam Altman are facing off in court with major implications for OpenAI, the San Francisco-based tech giant led by Altman.
The federal case, which concerns OpenAI’s evolution from nonprofit to profit-seeking, kicked off on Monday in Oakland, California. Judge Yvonne Gonzalez Rogers is managing proceedings alongside nine jurors and no alternates, according to a court filing last month.
The star-studded list of potential witnesses includes Altman, Musk and Microsoft CEO Satya Nadella, among other tech luminaries, a court filing showed.
Musk sued OpenAI and Altman, its CEO, in 2024, alleging that the company abandoned its mission of benefiting humanity in a sprint toward profits.
Musk, a co-founder of OpenAI, said he reached an agreement with the company’s leaders on the nonprofit course of the firm when it launched in 2015. The company later breached that “Founding Agreement,” Musk said in a 2024 court filing, when it made ChatGPT-4 available for use by Microsoft — the tech giant got access to the then-most powerful version of its popular chatbot under an exclusive licensing agreement.
Microsoft and OpenAI have renegotiated the exclusive licensing agreement, allowing OpenAI to strike deals with other tech firms.
OpenAI has rebuked the charges, calling them “baseless.” Microsoft has also denied any wrongdoing. Musk, the world’s richest person, counts $839 billion in wealth, according to Forbes. He is seeking $150 billion in damages from the tech companies.
OpenAI, which is not publicly traded, valued itself at $852 billion after a round of funding in March. Microsoft’s value — as measured by market capitalization — stands at about $3.1 trillion.
After jury selection, the case will take place in two sections, Gonzalez Rogers said in a court filing. An initial phase will focus on liability to determine whether any of the defendants committed illegal acts. A subsequent remedies portion will assess potential damages.
Musk and the OpenAI defendants will each be afforded 22 hours to present their case during the liability phase, Gonzalez Rogers said in a court filing earlier this month. Microsoft, also a defendant, will be given five hours for its case.
Musk will plead two claims against OpenAI: unjust enrichment and breach of charitable trust, according to a legal filing last week.
“OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft,” Musk said in the lawsuit.
Typically, deals established between a top investor and company leadership are set out in writing with concrete terms, some experts previously told ABC News, leaving Musk in a difficult position as he attempts to invoke what they say appear to be spoken commitments made years ago without a formal contract.
For his part, Musk says in the lawsuit that the agreement was memorialized in a legal filing when OpenAI was incorporated.
In the lawsuit, Musk alleges that Altman and OpenAI President Greg Brockman reaffirmed the founding agreement in written messages over the ensuing years.
“[I] remain enthusiastic about the non-profit structure!” Altman wrote to Musk in 2017, according to the lawsuit.
Musk, who helped bankroll OpenAI, launched a rival AI company in 2023 called xAI, which built a chatbot that competes with ChatGPT.
Acknowledging his previous criticism of the pace and ambitions of AI development, Musk said in a conference call on X in July 2023 that he entered the industry reluctantly.
In the lawsuit, Musk alleges breach of contract, breach of fiduciary duty and unfair business practices.
Musk is seeking a legal order that requires OpenAI to abide by its alleged founding mission of aiding humanity and retaining its nonprofit form, as well as compensation for the funds received by OpenAI while it carried out allegedly unfair business practices.
Ranking member Sen. Elizabeth Warren (D-MA) delivers an opening statement during the Senate Committee on Banking, Housing, and Urban Affairs confirmation hearing for Kevin Warsh, U.S. President Donald Trump’s nominee for Chair of the Federal Reserve, in the Dirksen Senate Office Building on April 21, 2026 in Washington, DC. (Photo by Andrew Harnik/Getty Images)
(NEW YORK) — The Social Security fund will run out of money in as little as six years, a shorter time frame than previously estimated, according to a report released earlier this month by the programs’ trustees.
News of the funding cliff prompted a pair of lawmakers to reach across the aisle and propose a rescue plan in an opinion piece last week for the New York Times.
Sen. Bernie Moreno, R-Ohio, and Sen. Elizabeth Warren, D-Mass., called for lifting a cap on the amount of annual income subject to the payroll tax that funds Social Security. Currently, the cap stands at $184,500.
In other words, the plan would require individuals making more than $184,500 per year to pay taxes on the entirety of their income, potentially generating trillions in additional funds for the program over the next 10 years.
The proposal could, in theory, help administrators avoid painful solutions for recipients, such as a reduction of Social Security payments.
Legislation reflecting the proposal has not been introduced. In the New York Times, Moreno and Warren said they are “working on legislation.” Spokespeople for Moreno and Warren declined to comment on the status of the measure.
Here’s what to know about a new bipartisan proposal for safeguarding Social Security:
Is Social Security in financial trouble?
Yes, the program faces an ever-tightening budget squeeze over the next handful of years, according to a report this month from the Social Security fund’s trustees.
The Social Security trust fund will run dry in 2032, unless Congress combines the program’s old-age and disability funds, in which case insolvency would arrive in 2034, the report found. A finding last year from the program’s trustees predicted Social Security would become insolvent in 2033 or 2034.
The program generates revenue through a payroll tax paid by employees and employers, setting the income apart from the overall federal budget. Since the early 2010s, however, Social Security has paid more in benefits than it takes in through taxes, shrinking the program’s available funds, according to a study issued by the Urban Institute earlier this year.
The budget shortfall has been exacerbated by a decline in births and a reduction of immigration, resulting in fewer taxpayers at the same time that many Baby Boomers have begun receiving benefits. The One Big Beautiful Bill also removed a tax on Social Security benefits, depleting another source of the program’s revenue.
What is the Social Security reform proposal from Warren and Moreno?
The bipartisan reform proposal would tweak the payroll tax that funds Social Security.
The program is funded by a 12.4% payroll tax, which is evenly split between employers and workers. The tax, however, applies only to a maximum of $184,500 in annual income, meaning any income beyond that amount remains tax free.
The proposal put forward by Warren and Moreno would lift the cap on taxable income, allowing the tax to apply to the entirety of a person’s income even if they make more than $184,500 per year.
“Since the vast majority of Americans make less than that, most people are paying Social Security taxes on 100 percent of their earnings while the highest earners are paying on only part of theirs,” Warren and Moreno said in a co-authored opinion piece in the New York Times.
The elimination of the cap on taxable income would generate about $3.4 trillion in added revenue over the next decade, according to an analysis from the non-partisan Peterson Institute. The policy change would close more than half of the program’s funding gap, the group said.
“With rising prices and artificial intelligence causing economic uncertainty for the future, Social Security must remain a stable foundation to help retirees afford life’s basic necessities,” Warren and Moreno said.
The proposal drew opposition from at least one conservative lawmaker. Sen. Jon Husted, R-Ohio, faulted the plan for what he described as a “giant tax increase.”
“We need to secure social security, we need to protect it, we need to make it stronger,” Husted told “The Guy Benson Show” last week. “But I’m not on board with the approach that they’ve outlined.”
What are some alternative reforms for funding Social Security?
As the program’s budget woes have deepened in recent years, elected officials and researchers have proposed a range of solutions. As with any financial shortfall, the fixes either increase revenue or slash expenses.
An alternate means of increasing tax revenue for the program involves ratcheting up the payroll tax by one percentage point from 12.4% to 13.4%, the Peterson Institute said. That move would generate $601 billion in additional revenue over 10 years, closing about a quarter of the program’s funding gap, the group added.
If Congress fails to address the projected budget shortfalls, automatic cuts will dial back Social Security benefits by about 25% in 2032, the Social Security fund’s trustees said earlier this month.
Earlier this month, a bipartisan bill introduced in the House proposed establishing an independent commission composed of 13 members appointed by leaders in Congress and the president. The commission would seek out fixes for the long-term sustainability of the program. The bill, which counts three cosponsors, has been appointed to two House committees for consideration.
As the years pass, the task of reforming Social Security becomes a greater and greater challenge, the Urban Institute said.
“Waiting only makes the changes larger and more difficult,” the group added.
Fuel prices are displayed at a gas station on June 09, 2026 in Chicago, Illinois. (Scott Olson/Getty Images)
(NEW YORK) — Consumer sentiment improved in June for the first time since the outbreak of the Iran war as gasoline prices eased in recent weeks, but shopper attitudes remained near their worst level on record, University of Michigan survey data on Friday showed. The reading exceeded economists’ expectations.
The survey snapped three consecutive months of dampening consumer sentiment, recovering from an all-time low in May, data showed. The University of Michigan has conducted the survey for the past 80 years.
This improvement in sentiment was widespread, seen across age, education and political party, Surveys of Consumers Director Joanne Hsu said in a statement. Overall assessments and expectations of personal finances and business conditions all rose in June, she noted.
The fresh figure comes days after a government report on inflation showed the pace of price increases exceeded 4% for the first time in three years.
Prices rose 4.2% in May compared to a year earlier, increasing 0.5% from the prior month, according to U.S. Bureau of Labor Statistics data.
Consumers expect inflation to move higher over the next year, hitting a pace of 4.8% in June 2027, the University of Michigan survey showed.
The Middle East conflict prompted the Iranian closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of global oil supply. The standoff triggered one of the largest oil shocks ever recorded, sending gasoline prices higher.
Drivers stung by high gas prices have enjoyed some welcome relief over recent weeks, however, even as the impact of the Iran war continues to choke off oil supply.
The national average price of a gallon of gas stands at $4.10, marking a decline of 40 cents, or 8.8%, over the past month, AAA data showed. Gas prices, however, remain $1.12 higher than where they stood before the Iran war.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper remains lackluster.
Spending slowed over the first three months of 2026 compared to the previous three-month period, according to government data issued earlier this year. The economy remained solid at the outset of this year, however, as gross domestic product rose 2% on an annualized basis, the report showed.
