Nvidia’s latest earnings report surpassed expectations, with revenue climbing 62% to $57 billion and a robust forecast for the current quarter, propelling its stock higher and assuaging fears about an AI investment bubble.
On Wednesday, Nvidia released its financial results for the quarter ending in October, revealing a significant beat on both revenue and profit. The chipmaker reported revenue of $57 billion, a 62% increase from the same period last year, driven by soaring demand for its artificial intelligence components. Net income jumped 65% to $31.9 billion, underscoring the company’s dominant position in the AI sector. The strong performance came amid heightened investor anxiety over whether AI stocks are overvalued.
The data center division, which includes AI chips, saw sales rise 66% to over $51 billion, highlighting the insatiable appetite for computing power in the AI era. Nvidia’s Blackwell systems, its latest generation of graphics processing units (GPUs), were particularly in demand, with CEO Jensen Huang describing sales as “off the charts.” The company also provided an optimistic outlook, forecasting fourth-quarter revenue of approximately $65 billion, which exceeded analysts’ estimates and signaled continued growth.
In response to the earnings beat, Nvidia’s shares surged about 4% in after-hours trading, reversing a recent slide in the stock market. The S&P 500 had fallen for four consecutive days leading up to the report, partly due to concerns about the sustainability of AI investments. Nvidia’s results provided a much-needed boost, with the company’s performance often seen as a barometer for the broader AI industry.
Huang emphasized Nvidia’s strength across all phases of AI development, from training to inference, and noted that cloud GPUs are sold out, indicating persistent demand. He dismissed talk of an AI bubble, stating that from Nvidia’s perspective, the growth is solid and based on real technological advancements. The company’s confidence was further reflected in its ability to secure massive orders, including a previously announced $500 billion in AI chip orders through next year.
The earnings report arrives at a critical juncture for the tech sector, where giants like Meta, Alphabet, and Microsoft are ramping up AI spending. Industry leaders have warned of “irrationality” in the current boom, but Nvidia’s results suggest that core players are still thriving. The chipmaker’s deals with AI firms such as OpenAI, Anthropic, and xAI create a complex web of investments that has drawn regulatory scrutiny.
Beyond financials, Nvidia is expanding its global footprint, with recent announcements including a data center complex in Saudi Arabia in partnership with Elon Musk’s xAI. This project, outfitted with hundreds of thousands of Nvidia chips, aligns with broader geopolitical moves, such as the U.S. approval of advanced AI chip sales to Saudi Arabia and the UAE. However, regulatory constraints on exports to China remain a challenge, as highlighted by CFO Colette Kress.
Looking ahead, investors will monitor how Nvidia manages its order backlog and navigates regulatory hurdles. The company’s ability to maintain its growth trajectory will be crucial for the AI ecosystem. With the AI revolution still in its early stages, Nvidia’s continued innovation and execution will likely shape market sentiment in the coming months.
