Nvidia Torches AI Bubble Talk With Blowout Q3, Stock Pops After-Hours: CEO Says Blackwell Chip Sales ‘Off The Chart’

• Nvidia’s CEO said compute demand keeps accelerating and compounding across training and inference.
• The contribution of China-specific H20 chips was insignificant.
• On the earnings call, Nvidia stated that it is on track to hit its $500 billion forecast for Blackwell and Rubin.

Nvidia Corp. (NVDA) shares jumped over 5% in Wednesday’s extended session after the artificial intelligence (AI) bellwether reported another blowout quarterly performance. Calling the guidance “eye-popping,” Wedbush’s Daniel Ives said it will be a major positive catalyst for Nvidia and the bullish AI Revolution thesis.

In the process, Nvidia’s stock appears on track to snap its two-session losing streak and reverse most of its November losses.

Nvidia’s Q3 Earnings Snapshot

CEO Jensen Huang delivered one of the most bullish AI forecasts, allaying some of the skepticism that has been building. The executive said, “Blackwell sales are off the charts, and cloud GPUs are sold out.”

“Compute demand keeps accelerating and compounding across training and inference — each growing exponentially. We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”

Here’s how the headline numbers compare:

• Adjusted earnings per share (EPS): $1.30 (up 60% YoY) vs. est $1.25 consensus (Fiscal.ai)
• Revenue: $57.01 billion (up 62% YoY & up 22% QoQ) vs. est $55.03 billion

Nvidia’s adjusted gross margin contracted 1.4 basis points (bps) YoY to 73.6% but improved 0.9bps sequentially.

Nvidia’s Businesses — How Q3 Performance Stacked Up

The Santa Clara, California-based chipmaker’s data center business turned in another record revenue performance, recording sales of $51.2 billion (roughly 90% of overall revenue). YoY, the growth was 66%. The sequential increase was 25%.

In prepared remarks, CFO Colette Kress said Blackwell Ultra was the company’s leading architecture across all customer categories, while the previous Blackwell architecture also saw strong demand. The company is on track to launch its next iteration, named Vera Rubin, next year.  She clarified that China-specific H20 chips made a negligible contribution, at $50 million.

Gaming and AI PC revenue rose 30% YoY to $4.3 billion but slipped 1% from the previous quarter. Nvidia attributed the sequential drop to channel inventories reaching more normalized levels as the holiday season approached. Professional & visualization, and automotive & robotics revenue grew to $760 million annually and $592 million sequentially, respectively. 

Nvidia’s board declared a quarterly cash dividend of $0.01 per share, to be paid on Dec. 26, to shareholders of record on Dec. 4.

Nvidia’s Q4 Outlook

For the fourth quarter, Nvidia guided revenue to $65 billion, plus or minus 2%, and adjusted gross margin to 75%, plus or minus 50 bps. Analysts, on average, brace for revenue of $61.75 billion for the quarter.

Deepwater Asset Management’s Gene Munster said, “Jensen was over the top near and long term bullish.” The fund manager believes next fiscal year’s revenue growth will be at least 54% versus the 41% consensus forecast, and the margin will be maintained at current levels.

On the earnings call, Huang said Nvidia's balance sheet is sufficient to support its partners and that all investments are aimed at expanding the reach of its CUDA systems. According to Munster, this suggests partnerships will keep coming. As recently as this week, Nvidia and Microsoft announced investments in AI startup Anthropic.

On the earnings call, Kress said the company is on track to hit its $500 billion forecast for Blackwell and Rubin. 

Huang’s Take On AI Bubble

The Nvidia CEO also said, “There's been a lot of talk about an AI bubble. From our vantage point, we see something very different.” He talked about three transformations the tech world is experiencing: from CPUs to GPU-accelerated computing, the AI transformation of existing apps and the enabling of new ones, and agentic AI. “Consider these 3 fundamental dynamics; each will contribute to infrastructure growth in the coming years.”

What Retail Feels About  Nvidia Stock

Retail sentiment toward Nvidia stock among users of the Stocktwits platform shifted to ‘extremely bullish’ by late Wednesday, from ‘bullish’ a day before. The message volume on the stream rose to ‘extremely high’ levels.’

Making sense of what Nvidia’s results hint at, a user said, “Tech stocks have been beaten bad the last weeks. AI is young, just buy buy buy.”

Another user expected the stock to reclaim the $200 level with the analysts’ upgrades they anticipate.

Nvidia’s stock settled Wednesday’s regular session up 2.85% at $186.52, taking its year-to-date gains to 39%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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