Nvidia reports its third-quarter earnings after the close tomorrow as its stock flirts with correction territory — a roughly 10% drop from a prior peak — and investors are still wary of its sky-high valuation.

Why it matters: Wall Street strategists say: Let them. The more doubt, the more room stocks like Nvidia have to run in this bull market.

What they're saying: "The more skepticism, the better," Jake Manoukian head of investment strategy at J.P. Morgan Private Bank, tells Axios. "It would be a worse sign for us if, like, everyone was all in. That's what a bubble feels like."

Zoom in: As the naysayers worry about valuations, the bulls make their case.

• Nvidia has a "central and secure" role in the AI investment boom, Nancy Tengler, CEO and chief investment officer at Laffer Tengler Investments, writes in a note.
• The chip giant is expected to generate more than $70 billion in net income in 2025 and has multiyear capacity commitments as well as more demand than it can meet, indicating future upside.
• Hyperscaler cloud revenue is also expected to continue to increase heading into 2026 as more companies adopt AI, according to Citi analyst Atif Malik.

The other side: The bears are focused on several potential headwinds.

• The biggest customers of Nvidia are the hyperscalers that have been increasingly taking on debt to fund their lofty AI ambitions.
• Demand for Nvidia chips is strong, as tech companies fight to win the AI race. But what happens if they can't afford the battle anymore?
• At 31 times forward earnings, the share price of Nvidia isn't trading at dot-com bubble highs, which were closer to 40, but it keeps inching up.
• There's U.S.-China relations, geopolitical concerns, the macro backdrop, questions about retail's role in pushing up stocks…We could go on.

State of play: Over 70 analysts have buy ratings on Nvidia and only one sell rating, per Bloomberg. Hedge fund managers paint a more bearish picture.

• Several hedge funds sold their stakes in Nvidia in the third quarter, including Peter Thiel's fund Thiel Macro LLC.
• Michael Burry of "The Big Short" fame disclosed a bearish bet on the stock before announcing his hedge fund retirement.
• A Bloomberg analysis of more than 900 13F filings from hedge funds found an even split of bullish and bearish positions on the chipmaker, indicating that Wall Street is mixed on how to view and trade the stock.

Zoom in: Even if other companies start to take share from Nvidia, that's fine with the bulls, who see enough demand to go around.

• "AMD is starting to take some share" from Nvidia, Tengler writes. "We actually think a broadening out for the group is good for the market and good for the AI trade."

The bottom line: The 2026 outlook season on Wall Street is here, and so far, none of the major banks see an AI bubble. But if people want to keep asking about it, that's no problem for them.

• They'll keep buying in the meantime.

Small-business owners remain more concerned about inflation than any other challenge, and most are increasing prices to deal with rising costs, according to a new Bank of America study out today.

Why it matters: The affordability crisis isn't just a consumer matter. Higher prices are weighing on businesses too and denting their outlooks for 2026.

By the numbers: The 2025 Bank of America Business Owner Report finds that 70% of respondents rank inflation as a top concern, level with 2024 and ahead of issues like tariffs or political uncertainty.

• 77% say their costs have increased by an average of 18%.
• 76% say they raised prices as a result by an average of 12%.

How it works: Ipsos surveyed over 1,070 small and midsized business owners in the U.S. in September with less than $50 million in revenue and fewer than 500 employees.

Reality check: For the most part, business owners are optimistic about the coming year, despite cost pressures.

• About three-quarters of respondents expect their revenue to increase in the next 12 months — down just slightly from last year — and about half expect their local economies to improve.
• Just one-quarter say they definitely do not plan to expand their business, and only 1% say they expect layoffs.

What they're saying: "We do see that confidence in the year ahead, and they're very focused on growth," Sharon Miller, president of business banking at Bank of America, tells Axios.

• "We're talking about companies with less than 500 people, and so, they're more nimble, they're able to pivot," she says.
• "I do believe that, when it comes to their own business, they do feel that they have control over what they can do to really drive the business forward, and in a period of uncertainty," she adds.

The bottom line: Small businesses are optimistic even as they are focused on managing cost pressures.

For the first time since April, the S&P 500 closed below its 50-day moving average, a chart from chartered market technician Mike Zaccardi shows.

Why it matters: This is a bearish signal as sentiment around the Big Tech stocks that have powered the market to its latest record highs is souring.

Reality check: Down days have recently come alongside a rise in the number of advancers versus decliners in the market. That may indicate investors are trimming exposure to their big winners year to date and adding to unloved corners of the market.

What to watch: Nvidia earnings, which could make or break the next six weeks of market activity.