Scale AI Fuels Sector Growth While Nvidia Reports Strong Earnings

The artificial intelligence sector is buzzing with significant investments and market movements, even as concerns about high valuations persist. Lambda, a key player in AI cloud infrastructure, announced on November 18, 2025, it secured over $1.5 billion in funding from TWG Global and USIT. This substantial capital injection aims to fuel the construction of gigawatt-scale AI factories and supercomputers, addressing the surging demand for compute power. Lambda, which already serves tens of thousands of customers, also has a multibillion-dollar deal with Microsoft, mirroring a similar agreement Microsoft holds with CoreWeave. Simultaneously, Nudge Security, a company specializing in SaaS and AI security governance, raised $22.5 million in Series A funding on the same day. Led by Cerberus Ventures, this investment will accelerate product development and market expansion. Since its launch in October 2022, Nudge Security has tripled its annual recurring revenue and acquired nearly 200 customers, highlighting the growing need for securing AI tools within the broader SaaS ecosystem. Meanwhile, the broader AI stock market faces scrutiny, particularly ahead of Nvidia's Q3 earnings report. Investors are wary of high valuations, with Nvidia's CEO Jensen Huang having previously set high expectations for 2025-2026 revenue. Analysts predict strong numbers for Nvidia, with revenues expected to hit $55.19 billion, a 57% increase year-over-year, and net income projected at $30.85 billion. Nvidia's chips are crucial for the AI revolution, with Microsoft accounting for 18% of its revenues and Meta nearly 10%. Despite its market capitalization ranging from $4.53 trillion to $4.71 trillion, Nvidia's stock recently fell over 4%, and large investors like Softbank have sold shares. However, some analysts, like Paul Meeks of Freedom Capital Markets, see the current sell-off as a buying opportunity, predicting Nvidia and Alphabet stocks could double quickly. The massive investment in AI, with Big Tech spending $405 billion in 2025 and OpenAI planning $1.15 trillion in hardware over ten years, raises concerns about a potential AI bubble. Maintaining Nvidia's valuation, for instance, requires 20-30% annual earnings growth, a challenging feat. Risks include high energy costs and a concentrated market where investments might outpace real demand. Alphabet (Google) is also making significant strides, with William Blair upgrading its Class C stock to a Buy rating following the release of the Gemini 3 AI model. Google's Gemini user base has expanded to over 650 million monthly active users, complemented by new specialized products like Gemini 3 Deep Think and Google Antigravity. Despite positive analyst ratings, corporate insiders have been observed selling shares. Amazon's stock experienced a dip after completing a $15 billion bond sale, amidst broader market concerns about AI stock valuations. While Rothschild & Co Redburn downgraded Amazon to neutral, citing potential inefficiencies in AI infrastructure, Needham maintained a Buy rating, trusting Amazon's project management capabilities. Amazon's stock is up only 2% this year, even after hitting a record high on November 3 following news of a deal with OpenAI. In other developments, Nvidia has invested in Reflection AI, a private company led by Misha Laskin. Reflection AI has developed a leading large language model and a low-power AI usage model, aiming to provide open intelligence to the public. The company is not publicly traded, offering indirect exposure through investments in Nvidia or AI-focused ETFs.

Key Takeaways

• Lambda secured over $1.5 billion in funding from TWG Global and USIT on November 18, 2025, to build gigawatt-scale AI factories and supercomputers.
• Lambda has a multibillion-dollar deal with Microsoft for AI infrastructure, similar to Microsoft's agreement with CoreWeave.
• Nudge Security raised $22.5 million in Series A funding on November 18, 2025, led by Cerberus Ventures, to enhance its SaaS and AI security governance platform.
• Nudge Security has tripled its annual recurring revenue and gained nearly 200 customers since its October 2022 launch.
• Nvidia's Q3 earnings report is highly anticipated, with analysts expecting $55.19 billion in revenue and $30.85 billion in net income, despite recent stock pressure and a 4% drop.
• Microsoft accounts for 18% of Nvidia's revenues, and Meta accounts for nearly 10%, highlighting their significant AI investments.
• The AI investment boom, with Big Tech spending $405 billion in 2025 and OpenAI planning $1.15 trillion in hardware, raises concerns about a potential market bubble.
• Alphabet (Google) received a Buy rating from William Blair due to its Gemini 3 AI model and a user base exceeding 650 million monthly active users.
• Amazon's stock fell after a $15 billion bond sale, with some analysts downgrading it due to concerns about AI infrastructure efficiency, despite a prior record high linked to an OpenAI deal.
• Nvidia has invested in Reflection AI, a private company developing a leading large language model and a low-power AI usage model.

Lambda Secures $1.5 Billion to Build AI Supercomputers

Lambda, a leader in AI cloud infrastructure, raised over $1.5 billion from TWG Global and USIT on November 18, 2025. This funding will help Lambda build gigawatt-scale AI factories and supercomputers to meet high demand. CEO Stephen Balaban stated their mission is to make computing as common as electricity, giving everyone the power of AI. Thomas Tull of TWG Global and USIT believes Lambda is well-positioned to solve the challenge of generating enough compute power for AI. The company, founded in 2012, serves tens of thousands of customers.

Lambda Raises $1.5 Billion for AI Data Centers

AI data center provider Lambda announced on November 18, 2025, that it raised $1.5 billion in funding. TWG Global led this investment round. This significant raise follows a multibillion-dollar deal Lambda had with Microsoft, similar to a previous agreement Microsoft made with CoreWeave. Lambda operates several US AI data centers and also sells its "AI factories" to large cloud providers. The company's funding greatly exceeded earlier expectations of hundreds of millions.

Nudge Security Gets $22.5 Million to Boost AI and SaaS Protection

Nudge Security, a leader in SaaS and AI security governance, announced on November 18, 2025, it raised $22.5 million in Series A funding. Cerberus Ventures led the round, with existing investors also participating. This investment will help Nudge Security speed up product development and expand its market reach. The company's platform gives businesses full control and visibility over SaaS applications and AI tools. Morgan Mahlock from Cerberus Ventures will join the Nudge Security board.

Nudge Security Secures $22.5 Million for AI and SaaS Security

Nudge Security, a company focused on SaaS and AI security, announced on November 18, 2025, that it raised $22.5 million in Series A funding. Cerberus Ventures led the investment, which will help the company grow its products and reach more customers. Since launching in October 2022, Nudge Security has tripled its annual recurring revenue and gained nearly 200 customers. CEO Russell Spitler explained that securing AI use requires looking at the whole SaaS ecosystem. Fredrick Lee, CISO of Reddit, praised the platform for its quick visibility into SaaS usage.

AI Stocks Face Pressure Before Nvidia Earnings Report

AI stocks faced pressure on November 18, 2025, as investors worried about high valuations before Nvidia's Q3 earnings report on Wednesday. Nvidia CEO Jensen Huang previously promised significant revenue for 2025-2026, putting immense pressure on the upcoming results. Ross Mayfield, an investment strategist at Baird, warned that any weak forecast from Nvidia could negatively impact the market. However, Michael Graham of Canaccord Genuity still believes a year-end rally is likely for the sector. The coming weeks will be crucial for the AI sector's future direction.

Is the AI Investment Boom a New Tech Bubble

The investment boom in Artificial Intelligence has reached a critical point, with Big Tech spending $405 billion in 2025 and OpenAI planning $1.15 trillion in hardware over ten years. This massive spending raises concerns about a potential AI bubble. Nvidia, with a $4.71 trillion market cap, needs 20-30% annual earnings growth to justify its value, which is hard to maintain. Risks include high energy costs, a concentrated market, and investments outpacing real demand. Investors should be cautious and consider diversifying with strong stocks or ETFs like RSP, EQL, and BALI.

Nvidia Earnings Report Expected to Show Strong Growth

Nvidia will report its last quarter's results on Wednesday, with analysts expecting strong numbers. Revenues are predicted to reach $55.19 billion, a 57% increase from a year ago, and net income is expected to be $30.85 billion. Nvidia's chips and GPUs are vital for the AI revolution, with major customers like Microsoft and Meta planning huge AI investments. Microsoft accounts for 18% of Nvidia's revenues, and Meta nearly 10%. Despite its $4.53 trillion market capitalization, Nvidia's stock has recently fallen over 4%, and large investors like Softbank have sold shares. Historically, Nvidia's stock has often dropped after strong earnings reports.

Analyst Predicts Nvidia and Alphabet AI Stocks Will Double

Paul Meeks, a managing director at Freedom Capital Markets, believes the current sell-off in AI stocks creates a great chance for investors. He disagrees with other analysts who downgraded Amazon and Microsoft. Meeks expects two AI stocks to "double quickly" from their low points. He named Nvidia, citing its strong ecosystem and innovation, and Alphabet, calling it an undervalued AI play with significant investments and data. Meeks also noted the partnership between Microsoft and Anthropic as an important development.

Amazon Stock Falls After Bond Sale and AI Spending Debate

Amazon stock fell after the company completed a $15 billion bond sale, its first since 2022. This comes amid a broader market slump and concerns about AI stock valuations. Rothschild & Co Redburn downgraded Amazon to neutral, with analyst Alexander Haissl suggesting AI infrastructure might be less efficient than traditional cloud. However, Needham analyst Laura Martin kept a buy rating, trusting Amazon's ability to manage large projects and get good returns on its investments. Amazon's stock is up only 2% this year, despite hitting a record high on November 3 after news of an OpenAI deal.

Alphabet Stock Gets Buy Rating Due to Gemini 3 AI Advances

William Blair analyst Ralph Schackart gave Alphabet Class C a Buy rating, citing the release of Google's new Gemini 3 AI model. The Gemini user base has grown to over 650 million monthly active users, showing its increasing popularity. Google also introduced specialized products like Gemini 3 Deep Think and Google Antigravity, strengthening its position in the AI field. On November 13, TD Cowen also maintained a Buy rating with a $335.00 price target. However, recent corporate insider activity shows more insiders selling their shares.

Investing in Reflection AI A Private Company

Reflection AI is a private company gaining attention due to an investment from Nvidia. The company, led by Misha Laskin, has developed a leading large language model and a low-power AI usage model. While Reflection AI initially focused on autonomous coding agents, its new goal is to provide open intelligence to the public. As of October 2025, Reflection AI is not publicly traded and has no set IPO date. Investors can gain indirect exposure by investing in Nvidia or AI-focused ETFs like the Global X Artificial Intelligence and Technology ETF.

Sources

• Lambda Raises Over $1.5B from TWG Global, USIT to Build Superintelligence Cloud Infrastructure
• AI data center provider Lambda raises whopping $1.5B after multibillion-dollar Microsoft deal 
• Nudge Security Raises $22.5M Series A to Secure Workforce AI and SaaS
• Nudge Security Raises $22.5M Series A to Secure Workforce AI and SaaS
• AI Stocks Under Pressure as Nvidia Earnings Loom, Analysts Eye Rally
• The Great AI Reckoning: Tech’s Next Dot-Com Moment (SP500)
• Nvidia results: What to expect and can they save the AI trade?
• Two AI stocks this analyst expects to double from sell-off lows
• Amazon Stock Slides Below Key Level After Bond Sale. Debate About AI Spending Keeps Heating Up.
• Buy Recommendation for Alphabet Class C: Gemini 3’s AI Advancements and Market Impact
• How to Invest in Reflection AI