Following the stock market volatility in the wake of the U.S. midterm elections and the latest scandal involving Nvidia (NASDAQ: NVDA) CEO Jensen Huang, a popular trading expert on X, Ali Martinez, decided to update the status of his key indicators that the artificial intelligence (AI) bubble is ready to burst.
This latest post comes as a continuation of a larger article published on October 31, which identified infrastructure underperformance, spending guidance cuts, Nvidia’s revenue growth, credit spreads and financing costs, software valuations breakdown, and semiconductor firms breaking long-term support as the six key harbingers.
The November 9 update revealed that Ali Martinez now estimates that two of the six have been triggered, two remain out of play, and that another two have been partially activated. Crucially, despite the latest turmoil and the post representing an update, the situation remains effectively unchanged from October 31.
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Additionally, Martinez highlighted that a ‘major investment cycle rarely reverses because of a single disappointing earnings report or technical breakdown’, indicating the trading expert believes most, or all, of the six must get triggered before the AI bubble bursts in earnest.
Is Nvidia about to lose 20% of its compute revenue?
Meanwhile, the latest turmoil affecting Nvidia might have pushed the timeline for more of the factors to trigger.
Specifically, the Jensen Huang cheating scandal – whether the Chinese spy links are proven or disproven – put the spotlight on earlier speculation that the company’s revenue might be far more reliant on the People’s Republic than is officially claimed.
In May, a short seller, Culper Research, even estimated that more than 20% of the blue-chip chipmaker’s compute sales might be attributable to the East Asian country.
Such allegations also exacerbate the increasingly strange clearance Nvidia has been receiving to ship its hardware to Chinese companies despite the export restrictions enforced by the U.S.
If the rumors are proven correct – and if the firm’s known approved contracts turn out to have been used to evade the restrictions – the semiconductor giant could soon suffer a major drop in revenue.
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Why all six AI bubble signs could get triggered quickly
Additionally, even if Nvidia’s hands are entirely clean and the accusations are baseless, a 2026 report regarding American hyperscalers might indicate that the company’s sales are nearing a nosedive.
In the first half of 2026, Microsoft (NASDAQ: MSFT) was alleged to have far less data center capacity than it had been implying, meaning that as much as 50% of the chips it purchased remain unused.
October, for its part, featured a report that Amazon (NASDAQ: AMZN) lacks the power to run billions of dollars’ worth of Nvidia GPUs it bought.
Such a setup – especially given the relatively short useful life of advanced AI chips – appears likely to lead major corporations to reevaluate the value of spending tens of billions of dollars on new hardware after failing to utilize the stock they already purchased.
Provided the circular financing accusations are largely accurate – and especially given the frequency with which Nvidia has stepped in to stabilize the sector and the investigations indicating that much of the new compute ends up finding only two customers – such a decision could lead to the entire industry unwinding.
The midterm election results, given that some members of the Democratic Party are calling for placing new roadblocks to rampant AI data center construction, also make the bearish scenario more likely.
Featured image via Shutterstock
