Quick Read
Block (XYZ) reduced staff 40% and shares popped ~30%; Nvidia (NVDA) invested in Lumentum (LITE) and Coherent (COHR) for next-generation AI infrastructure. AI proves transformative as Block’s mass AI-driven layoffs draw positive market response, with the sector shifting from model training to inference as Nvidia positions for robotics and physical AI.
The AI boom seems to be “so 2025” at this point. Apart from specific corners of the semi scene (most notably the ones in the right place at the right time), big tech and AI have looked like a money-losing trade. And while there may still be more downside on the way as big tech pulls the S&P halfway to a correction, I do think that longer-term thinkers who can tune out the near-term “noise” might be able to get a fairly discounted ticket to the AI revolution right here.
You may have already missed an inning or two, but, at the very least, there’s more ballgame to be had at a price that’s pretty compelling. Like a scalper who becomes more willing to part with his tickets at drastically lower prices after the game is a few minutes or even a full inning in, I do think Mr. Market might be discounting the premier AI names a bit too much right now.
What if it is still early days in the AI boom?
Of course, I could be wrong, and AI might be nothing more than a bubble that’s already bursting. At the same time, though, the disruptive response from new AI tools (Claude Code) and AI-driven mass layoffs Block (NYSE:XYZ) seem to suggest otherwise. Perhaps the biggest risk is what happens if AI isn’t a bubble, but a transformative technology that’s advancing on the fast curve.
Indeed, a 40% staff reduction is a bit of a jaw-dropper. And when you look at the stock price reaction (spoiler alert: it was overwhelmingly positive, as shares popped in the ballpark of 30%), perhaps there is reason for CEOs to remark on AI as a reason for cuts, rather than beating around the bush to avoid frowns from just about everybody other than shareholders.
As the AI revolution evolves, there are bound to be some past winners that begin to cool off and retreat (perhaps Nvidia (NASDAQ:NVDA)) while new winners rise up. As model training shifts gears to inference, as firms leverage the power of agentic AI and robotics to augment or replace, there are some other batters that might have a chance to land a grand slam as Nvidia has. Of course, Nvidia has seemingly already recognized and reacted to the shift towards inference with its Groq deal at the very end of 2025.
Jensen Huang might be giving Nvidia another shot at bat
While Nvidia stock itself has taken a seat, some of the brilliant moves made by Jensen Huang might give the GPU titan another shot at bat. Whether we’re talking about the pair of bets in Lumentum (NASDAQ:LITE) and Coherent (NASDAQ:COHR) to bet on the next generation in AI infrastructure, or rumors swirling around a new, specialized chip meant for high-speed inference, which could be unveiled at GTC 2026, Nvidia might already be where the puck is moving next in the AI boom.
Add physical AI models and the profoundly efficient versatility of Vera Rubin into the equation, and I’d be quite surprised if shares of Nvidia were to stay sideways for the entirety of 2026. Though exceptional quarters aren’t enough anymore, I do think that new innovations will, in due time, reignite enthusiasm again. What will be the OpenClaw of physical AI?
Time will tell. But when it comes, Nvidia might finally be ready to flex its muscles in robotics. And that alone makes the name worth standing by as inference, efficiency, and world models become the bigger needle movers in AI.
In short, Nvidia gained the early lead in AI when training dominated. With several smart deals and the release of less-covered platforms (including those catering to agentic and physical AI), it looks like the lead is for Nvidia’s to keep as it shifts gears to what’s next.
