Artificial intelligence-linked shares fell on Tuesday, in lead-up to AI bellwether Nvidia's quarterly earnings, which could offer clarity on demand and justify the sector's lofty valuations.

Long a Wall Street favorite, Nvidia has not outperformed the broader market recently, falling 3% over the last six months, worse than the S&P 500’s 7% return.

The report raised fears about the sustainability of AI infrastructure growth. That could mean less demand for Nvidia’s chips. TD Cowen’s Michael Elias said his team’s finding points to “a potential oversupply position” for Microsoft. Shares of Nvidia fell 4% on Friday.