Nvidia Reports Strong Demand Amid Investor Concerns
Jensen Huang, the CEO of Nvidia, expressed excitement over what he called “off-the-charts” demand for the company’s advanced chips after strong third-quarter results were released on Wednesday. This news was a significant relief for investors, especially those worried about a potential AI bubble.
Nvidia also offered optimistic expectations for the fourth quarter, forecasting sales of $65 billion—higher than the $61.66 billion that Wall Street had anticipated, according to LSEG data.
The results were viewed as a stabilizing factor in a market that has recently felt turbulent, with worries surrounding overvalued tech stocks and AI companies reportedly overspending on new technologies without clear revenue pathways.
“Blackwell’s sales are remarkable, and cloud GPUs are flying off the shelves,” Huang noted, highlighting the success of Nvidia’s latest chips.
He further mentioned that the AI ecosystem is rapidly evolving, noting an increase in “fundamental modelers” and AI startups cropping up across various industries and countries. “AI will permeate everywhere and do everything simultaneously,” he suggested.
After these strong results, Nvidia’s shares saw a rise of 4% in after-hours trading.
Major tech players like OpenAI, Amazon, Microsoft, Google, and Meta depend on Nvidia’s chips to operate their data centers and AI models, meaning Nvidia’s performance serves as a crucial indicator for the entire sector.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, remarked, “NVIDIA’s earnings are a noteworthy event due to its influence on significant stock indexes and its pivotal role in the ongoing AI development.”
In the third quarter, Nvidia’s earnings reached $1.30 per share, surpassing analysts’ expectations of $1.25. Overall revenue for the company stood at $57.01 billion, which surpassed forecasts and represented a 22% increase compared to the same quarter last year.
The company’s data center division, which makes up a significant chunk of its revenue, reported sales of $51.2 billion during this quarter.
Looking forward, Nvidia indicated it expects an adjusted gross margin of 75% for the quarter, slightly above the anticipated 74.5%.
Huang also mentioned last month that Nvidia anticipates reaching $500 billion in chip transactions by 2026.
However, ahead of the earnings report, worries about Nvidia’s future loomed as Japanese investment powerhouse SoftBank and billionaire investor Peter Thiel sold their entire stakes in the company, raising questions about Nvidia’s stock valuation.
