Nvidia’s latest earnings report surpassed expectations with robust revenue growth and an optimistic forecast, easing investor fears of an artificial intelligence bubble and sparking a rally in its stock and global markets.
On Wednesday, Nvidia announced its third-quarter results for fiscal year 2026, revealing a 62% year-over-year surge in revenue to $57 billion, well above Wall Street estimates of $54.9 billion. Profits also exceeded projections, climbing 65% to $31.9 billion, underscoring sustained demand for AI chips despite growing concerns about overinvestment. The company provided fourth-quarter revenue guidance of approximately $65 billion, signaling that the AI spending spree shows no signs of slowing. Immediately after the report, Nvidia’s stock jumped over 3% in after-hours trading, with some analyses noting gains of up to 5%.
The positive earnings had a widespread impact on financial markets, boosting confidence beyond Nvidia. European indices, including the Stoxx 600, rose about 1% at the opening bell on Thursday, with AI-related semiconductor firms like ASML and BESI posting gains. In Asia, chip stocks such as Samsung and Foxconn rallied in early trading, while U.S. stock futures advanced, reflecting a broader tech sector uplift. This ripple effect highlights Nvidia’s pivotal role in the AI ecosystem and its influence on investor sentiment across regions.
Nvidia CEO Jensen Huang directly addressed bubble concerns during the earnings call, stating that demand for the company’s Blackwell GPUs is “off the charts” and that cloud GPUs are sold out. He emphasized that fears of an AI bubble are overblown, pointing to the profitability and rapid adoption of AI technologies as evidence of a sustainable boom. Huang’s comments were bolstered by the strong quarterly performance and future outlook, aiming to reassure markets that had seen volatility due to AI-related anxieties.
The report comes amid heightened scrutiny of AI investments, particularly circular funding deals between chipmakers and AI firms. For example, Nvidia’s $100 billion investment in OpenAI in exchange for chip purchases has raised questions about the sustainability of such arrangements. Recent developments, like Anthropic’s commitment to $30 billion in computing capacity from Microsoft Azure using Nvidia chips, show that these deals continue, fueling debate about potential bubbles. However, Nvidia’s strong results suggest that current demand remains robust.
On the earnings call, CFO Colette Kress provided detailed examples of how AI is delivering returns for Nvidia’s partners, citing increased user engagement on Meta’s platforms due to AI recommendations and Anthropic’s expected $7 billion in annual revenue. She also highlighted efficiency gains, such as a 30% improvement in coding productivity at Salesforce through AI tools, demonstrating tangible benefits that extend beyond mere infrastructure spending. This evidence was part of a broader effort to counter narratives of an AI bubble with real-world success stories.
Analysts reacted positively to the earnings, with Thomas Monteiro of Investing.com noting that the results indicate the AI revolution is “nowhere near its peak” from both demand and supply perspectives. Ben Barringer of Quilter Cheviot added that Nvidia effectively addressed bear cases by discussing scaling laws, hyperscaler investments, and diverse demand sources, providing much-needed relief to investors. The strong performance prompted a sigh of relief across markets, which had adopted a risk-off attitude ahead of the report, with sell-offs in AI-related assets like bitcoin.
Looking ahead, Nvidia plans to expand its technology into new domains, such as cell phone towers and self-driving cars, as outlined by Huang at recent conferences. With tech giants like Meta, Microsoft, Amazon, and Google continuing to hike AI infrastructure spending, the company is well-positioned for future growth. Investors will monitor for signs of market saturation or regulatory changes, but for now, the ongoing innovation and deals suggest the AI boom remains resilient.
