nvidia’s record $57b revenue and upbeat forecast quiets ai bubble talk

Nvidia's Strong Third-Quarter Performance

Jensen Huang, founder and CEO of Nvidia, expressed considerable optimism during the company’s recent third-quarter earnings report. The financial outcomes appear to validate this positive outlook.

Revenue and Profit Growth

Nvidia’s revenue for the third quarter reached $57 billion, representing a 62% increase when compared to the corresponding quarter of the previous year. The company’s net income, calculated on a GAAP basis, amounted to $32 billion, a 65% year-over-year improvement. These results exceeded expectations set by Wall Street analysts.

Data Center Business Drives Expansion

The substantial revenue growth is primarily attributable to the robust performance of Nvidia’s data center business. This segment generated a record $51.2 billion in revenue, a 25% increase from the prior quarter and a 66% increase year-over-year.

Additional revenue streams included $4.2 billion from Nvidia’s gaming division, alongside contributions from professional visualization and automotive sectors, totaling $5.8 billion.

AI Demand and Infrastructure Investments

According to Nvidia’s CFO, Colette Kress, the acceleration of computing, the development of sophisticated AI models, and the rise of agentic applications are fueling the growth within the data center business. During the Q3 earnings call, Kress revealed that the company has announced AI factory and infrastructure projects encompassing a total of 5 million GPUs.

“This demand is widespread, extending to CSPs, sovereign entities, modern builders, enterprises, and supercomputing centers, and includes several significant infrastructure developments,” Kress stated.

Blackwell GPU Leadership

The Blackwell Ultra GPU, introduced in March and offered in various configurations, has emerged as a leading product within Nvidia’s portfolio. Demand for previous iterations of the Blackwell architecture also remained strong, the company reported.

Huang indicated that sales of the Blackwell GPU chips are experiencing exceptional growth, stating, “Blackwell sales are off the charts.”

Exponential Growth in AI

“Blackwell sales are off the charts, and cloud GPUs are sold out,” Huang communicated in the Q3 earnings statement. “Demand for compute resources continues to accelerate and compound for both training and inference – each experiencing exponential growth. We have entered a positive feedback loop within the AI landscape.”

Huang further elaborated that the AI ecosystem is rapidly expanding, with an increasing number of foundation model developers, AI startups, and adoption across diverse industries and countries. “AI is becoming ubiquitous, performing a multitude of tasks simultaneously,” he added.

Challenges in China

Kress acknowledged that shipments of the H20 GPU, designed for generative AI and high-performance computing, reached 50 million units, a result considered disappointing due to restrictions on sales to China.

“Significant purchase orders did not materialize this quarter due to geopolitical factors and heightened competition within the Chinese market,” Kress explained during the earnings call. “While we are disheartened by the current circumstances that prevent us from delivering more competitive data center compute products to China, we remain dedicated to ongoing dialogue with the U.S. and Chinese governments, advocating for the ability of American companies to compete globally.”

Future Outlook and Stock Performance

Nvidia anticipates continued growth, forecasting revenue of $65 billion for the fourth quarter. This projection contributed to a more than 4% increase in the company’s share price during after-hours trading.

Dismissing Bubble Concerns

Huang dismissed concerns about an AI bubble, asserting that the company is witnessing sustained growth. “There’s been a lot of talk about an AI bubble,” Jensen said during the company’s earnings call. “From our vantage point, we see something very different.”