CEO Jensen Huang also addressed the “AI bubble”
The world’s largest company, Nvidia (NASDAQ:NVDA) recorded another huge quarter in its third fiscal quarter, sending the stock price about 4% higher on Thursday.
Nvidia generated the typically gaudy results that we have come to expect from the AI juggernaut, as it beat lofty expectations from analysts.
- Revenue: $57B, a record, up 62% year-over-year and 22% from the previous quarter. This beat estimates of $54.9B.
- Net income: $31.9B, up 65% year-over-year and 21$% from last quarter.
- Earnings: $1.30 per share, up 67% year-over—year and 20% from Q2. This beat estimates of $1.25 per share.
Revenue was fueled by data centers and its Blackwell AI chips, which were introduced about a year ago. Revenue from data centers accounted for $51.2 billion of Nvidia’s $57 billion in total revenue. That’s up 25% from the previous quarter and up 66% from a year ago.
“Blackwell sales are off the charts, and cloud GPUs are sold out,” Jensen Huang, founder and CEO of NVIDIA, said. “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.”
The massive shifts driving AI
On the earnings call, Huang addressed the concerns about the AI bubble and why Nvidia is not like the rest.
“There has been a lot of talk about an AI bubble,” Huang said on the call, transcribed by Investing.com. “From our vantage point, we see something very different. As a reminder, NVIDIA is unlike any other accelerator. We excel at every phase of AI, from pre-training and post-training to inference.”
The Nvidia CEO then went on to explain the three massive platform shifts that are happening simultaneously and how Nvidia is at the center of all three.
“The world is undergoing three massive platform shifts at once, the first time since the dawn of Moore’s Law. NVIDIA is uniquely addressing each of the three transformations,” he said.
The three shifts, as he sees them, are:
- The transition to accelerated computing from CPUs to GPUs.
- The transition to generative AI, which is “supercharging existing applications and business models.”
- The transition to agentic and physical AI, “giving rise to new applications, companies, products, and services.”
He said each will drive infrastructure growth in the years ahead and NVIDIA’s architecture enables all three transitions.
Outlook calls for $65B in revenue in Q4
For the fiscal fourth quarter, Nvidia expects $65 billion in revenue, which would be up 14% from Q3. The gross margin is forecasted to be 74.8%, up from 73.6% in Q3. Operating expenses are expected to be approximately $6.7 billion, up from $5.8 billion in Q3.
The surging revenue is supported by several new deals that Nvidia has made or has in the pipeline.
In Q3, Nvidia landed a deal with OpenAI to deploy at least 10 gigawatts of NVIDIA systems for OpenAI’s AI infrastructure. It also inked a deal with Anthropic to run NVIDIA’s infrastructure, initially adopting 1 gigawatt of compute capacity. Nvidia also formed partnerships with Intel and Oracle, among others.
In addition, Nvidia will also supply some 600,000 GPUs for a new data center being built in Saudi Arabia by Humain, an AI company backed by the sovereign PIF.
Nvidia got several price target upgrades after earning, including a raise to $352 from Evercore, a $275 target from Baird, a $255 target from Truist, and a $250 price target from Jefferies. Nvidia stock has a median price target of $224 per share, which suggests 15% upside. It is trading at 27 times forward earnings.
