Nvidia Surpasses Expectations with Robust Third-Quarter Earnings Boosted by AI Chip Demand
Nvidia has reported robust third-quarter earnings, significantly surpassing market expectations, driven by strong sales of its AI chips. The company’s earnings per share reached $0.81, with a revenue of $35.1 billion, eclipsing analysts’ predictions of $0.74 EPS and $33.2 billion in revenue. For the upcoming fourth quarter, Nvidia forecasts revenue of approximately $37.5 billion, just shy of the anticipated $37 billion.
Nvidia CEO Jensen Huang heralded this period as the “age of AI,” noting substantial demand for their latest chip, Blackwell. The Data Center segment, which constitutes the bulk of Nvidia’s revenue, generated $30.8 billion—up 112% year-on-year, beating projections of $29 billion. Gaming revenue also showed an increase, reaching $3.3 billion against expectations of $3 billion.
Despite these positive figures, Nvidia’s stock price fell by roughly 1% in after-hours trading, reflecting investor concerns over growth sustainability. Year-to-date, Nvidia shares have surged by 192%, outperforming competitors such as AMD and Intel.
Amidst this success, Nvidia faces potential challenges ahead. The company is at risk from geopolitical tensions and threats of tariffs from former President Donald Trump on products from Taiwan, where a majority of Nvidia’s chips are manufactured. Market analysts have raised concerns over maintaining growth amidst heightened competition in AI chips and the changing landscape of AI development methodologies.
Furthermore, notable investors are adjusting their positions, with billionaire Ray Dalio’s Bridgewater Associates reducing its stake in Nvidia by 27%. Market sentiment reflects a broader caution regarding tech stocks and their future earnings, despite Nvidia’s strong performance.
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