Nvidia blew past Wall Street financial targets in its third quarter, posting a 62% surge in revenue and forecasting continued strong growth for the current quarter with demand for its AI chips showing no sign of slowing down.
“Blackwell sales are off the charts, and cloud GPUs are sold out,” CEO Jensen Huang said in a prepared statement.
Nvidia’s stock rose as much as 5% in after hours trading, after finishing the regular session up 3%.
Sales in the company’s datacenter unit, which accounts for the vast majority of Nvidia’s business, expanded 66% year-over-year to $51.2 billion, compared to the $49.7 billion expected by analysts. Overall revenue of $57 billion was above Nvidia’s own projections and topped the $55.5 billion expected by Wall Street.
Looking ahead, Nvidia projected fourth-quarter revenue between $63.7 billion and $66.3 billion, well above the $62.4 billion that analysts expected.
Nvidia’s strong results are a clear sign that the AI boom shows no signs of slowing down — but the question is whether those headline numbers will be enough to soothe jittery investors about the industry’s broader outlook. The biggest source of market nerves is the growing concern over whether AI revenue growth can keep pace with the staggering capital expenditures required to build and run next-generation models. There’s also the risk that only a handful of companies will capture most of the economic value.
Mounting power constraints, supply chain issues and fresh scrutiny of “circular” AI investments have also raised doubts about how sustainable the current trajectory really is. Analysts have warned about Nvidia’s role in a possible AI bubble — especially given the company’s $24 billion AI-investment blitz in 2025.
Case in point: In the deal announced Tuesday, Nvidia and Microsoft will invest up to $10 billion and $5 billion, respectively, in Anthropic. In turn, Anthropic will purchase $30 billion of Azure compute capacity, while also collaborating with Nvidia on future chip and model-engineering work. This follows Nvidia’s $6.6 billion investment in OpenAI in October and a $6 billion investment in Elon Musk’s xAI in November, per PitchBook, as well as its commitment to invest up to $100 billion in OpenAI in a massive September deal that sent the stock higher.
In recent weeks, investors have been reassessing expectations, said Daniel Newman, analyst and CEO of the Futurum Group: “Has there been too much exuberance? Is this demand real?”
Still, Nvidia’s results speak for themselves for those looking for optimism. Still, some analysts insist this isn’t a bubble. And analysts like Stephanie Link, chief investment strategist at Hightower Advisors, argues that the demand is fundamentally real — and far broader than Big Tech.
“I don’t think we are in a bubble in AI because there are so many industries that are seeing significant growth,” she said. “AI needs more data centers, an upgraded grid, and more power — which we don’t have enough of. Each industry will be spending billions: Big Tech $400B, industrials $100B building data centers, utilities $200B, and power companies $100B — and that’s just this year. The demand is there, unlike the dot-com bubble where there wasn’t real demand.”
