Investors concerned about Nvidia’s earnings can breathe a sigh of relief. CEO Jensen Huang delivered encouraging news during the company’s latest investor call, reassuring stakeholders of the company’s strong position.
Huang addressed the speculation surrounding an AI bubble, stating, “There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different.”
The “something very different” Huang mentioned refers to a staggering influx of revenue. Nvidia recorded $57.01 billion in revenue for its fiscal third quarter, surpassing market expectations of $54.92 billion according to CNBC. Additionally, earnings per share came in at $1.30, exceeding the forecast of $1.25.
Even more impressive, Nvidia’s data center business reached a staggering $51.2 billion, growing 66% year-over-year. Huang expressed optimism about future demand, stating in the earnings press release, “Blackwell sales are off the charts, and cloud GPUs are sold out,” with revenue projections for the next quarter set at $65 billion, well above the anticipated $61.66 billion.
Nvidia CFO Colette Kress emphasized confidence in the company’s future, noting, “We currently have visibility to a half a trillion dollars in Blackwell and Rubin [chips] revenue from the start of this year through the end of calendar year 2026.”
In the lead-up to this highly anticipated report, the AI industry held its breath. Nvidia, the first company to achieve a $5 trillion market cap, has been the focal point of concerns about an AI bubble, primarily because it stands as the leading global supplier of chips critical for AI applications.
Many experts, including prominent investors and economists, have voiced concerns over potential overvaluation of AI stocks recently. Adding to these worries, major investors like Japan’s SoftBank and Peter Thiel’s Thiel Macro offloaded their stakes in Nvidia within the last two weeks.
Investors looked to this recent report as a barometer for Nvidia’s ability to justify its lofty valuations and quell fears of a bubble burst. Reacting positively to the results, Nvidia shares rose more than 5% upon the report’s release, indicating investor satisfaction with the company’s performance.
Nvidia had a busy quarter as well, announcing significant partnerships, including one with AI competitor Anthropic. These partnerships have stirred further conversation around the so-called AI bubble, with some experts describing the intricate web of investments among tech giants as “circular dealmaking.”
A recent SEC filing revealed intriguing details about these collaborations. While Nvidia describes its commitment to invest up to $10 billion in Anthropic as a firm “agreement,” its ensemble investment of $100 billion in OpenAI is labeled merely as “a letter of intent.” Journalist Ed Zitron was the first to highlight this distinction. Nvidia has yet to provide a comment on this matter to Gizmodo.
Furthermore, this past quarter saw Nvidia hosting its inaugural GPU Technology Conference in Washington D.C., where CEO Huang engaged with the Trump administration regarding the ongoing restrictions on chip sales to China.
Kress remarked, “Sizable purchase orders never materialized” during this quarter due to the prevailing political climate. “While we were disappointed in the current state that prevents us from shipping more competitive data center compute products to China, we are committed to continued engagement with the U.S. and China governments,” she added.
Huang’s diplomatic efforts show signs of promise. According to Axios, White House officials are reportedly advising lawmakers to abandon the GAIN AI Act, which could severely restrict Nvidia’s chip sales to China if passed as part of the forthcoming defense bill.
What are the implications of Nvidia’s impressive earnings on the AI industry?
Nvidia’s stellar financial results provide a strong indication that despite concerns over an AI bubble, the company’s robust revenue and growth reflect a solid foundation for the ongoing expansion of the AI industry.
How does Nvidia’s chip production influence the AI market overall?
As the leading supplier of chips for AI applications, Nvidia’s production capabilities directly impact the scalability and performance of AI technologies, making it a crucial player in the market.
What should investors consider when evaluating Nvidia’s stock?
Investors should consider the company’s fundamentals, future growth prospects, and the broader market conditions impacting the tech and AI sectors, including geopolitical factors.
Is the AI bubble a valid concern for investors?
While some experts raise red flags about overvaluation, Nvidia’s performance suggests that the demand and innovation in AI may sustain growth, offsetting bubble fears.
How is Nvidia positioned compared to its competitors?
Nvidia’s partnerships and market dominance in chip production for AI give it a competitive edge over rivals, positioning it well for future growth in an increasingly AI-driven world.
As Nvidia continues to soar, it’s a great time to stay informed and explore more insights into the tech landscape. Visit Moyens I/O for more related content.