The world’s most valuable company NVIDIA has reported record Q3 revenue of $57B – representing a 62% spike from last year, sending a wave of relief through Wall Street and the tech sector.
NVIDIA reported its first acceleration in sales in seven quarters, providing a boost to the tech sector amid longstanding fears of an AI bubble. Shares of the company were up 4.46% today, following yesterday’s earnings call.
NVIDIA Q3 Results
Sales in NVIDIA’s data-centre segment – which makes up a majority of the company’s revenue – rose to $51.2B in the quarter ended October 26, beating analysts’ expected sales of $48.62B, according to Reuters.
Fourth-quarter sales are seen at $65B, plus or minus 2 – again beating analyst estimates of $61.66B, according to data from LSEG.
Four customers made up for 61% of sales in Q3, up from 56% in Q2.
Jensen Huang, CEO of NVIDIA, played down fears of an AI bubble amid the demand for the company’s chips, saying: “From our vantage point, we see something very different.
“Blackwell sales are off the charts, and cloud GPUs are sold out. 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.”
NVIDIA returned $37B to shareholders in the form of shares repurchased and cash dividends during the first nine months of fiscal 2026, and, as of the end of the third quarter, the company had $62.2B remaining under its share repurchase authorization.
NVIDIA is set to pay its next quarterly cash dividend of $0.01 per share on December 26, 2025, to all shareholders of record on December 4, 2025.
Outlook for the fourth quarter of fiscal 2026 is as follows:
- Revenue expected to be $65B, plus or minus 2%.
- GAAP and non-GAAP gross margins expected to be 74.8% and 75.0%, respectively, plus or minus 50 basis points.
- GAAP and non-GAAP operating expenses are expected to be approximately $6.7B and $5B, respectively.
- GAAP and non-GAAP other income and expenses are expected to be an income of approximately $500M, excluding gains and losses from non-marketable and publicly-held equity securities.
- GAAP and non-GAAP tax rates are expected to be 17%, plus or minus 1%, excluding any discrete items.
Beyond the Stats
There had been fears that results which were not positive enough could cause stock disruption and confirm long-held fears that the AI sector is a bubble waiting to burst.
Some analysts think the results won’t quell fears of a bubble, pointing to circular financing in the sector.
In its press release, NVIDIA announced a strategic partnership with OpenAI to deploy at least 10 gigawatts of its systems for OpenAI’s AI infrastructure, alongside other collaborations with tech giants like Google Cloud, Microsoft, Oracle, and xAI.
Anthropic will also, for the first time, run and scale on NVIDIA infrastructure, initially adopting 1 gigawatt of compute capacity with NVIDIA Grace Blackwell and Vera Rubin systems.
NowBen founder Ben McCarthy says that bubble fears can be spread by people who do not really understand the future power of the technology, and while adoption has been slow, end users are still massively investing:
“Imagine if they solve automated customer support, which isn’t too far-fetched. That is a global industry that can be transformed overnight with billions saved in wasted costs, and happier customers who can get instant decent support, e.g. upgrading a mobile phone contract, which is just a nightmare.
“The stock market has been falling sharply on this fear, and although we might be in a mini bubble that does fall even more over the next couple of years, it’s based on real technology that is driving way more value than the cloud digital transformation initiatives.”
Chief technical strategist for LPL Financial, Adam Turnquist, told the BBC that the question was not whether the company would beat expectations, “but by how much”.
Senior equity analyst at Hargreaves Lansdown, Matt Britzman, said that valuations for certain areas of the AI sector “needed to take a breather, but Nvidia is not in that camp”.
Huang previously said that he expected $500B in AI chip orders through next year.
NVIDIA’s chief financial officer, Colette Kress, told analysts that the company would “probably” be taking more orders on top of the $500B.
Final Thoughts
Tech sector titans have been ramping up spending on AI amid a boom, and last month NVIDIA – which is at the very heart of the industry – became the first ever company to be valued at $5 trillion.
Strong revenues have eased investor concerns about significant AI spending, but fears are not yet eliminated – and it’s doubtful they ever will be.