Nvidia’s massive earnings put a damper on Wall Street’s AI bubble fears.
Analysts said the company’s third-quarter results prove the AI boom shows no signs of slowing down.
On Wednesday, Nvidia posted revenue of $57 billion, beating Wall Street’s expectations of $55 billion. The company’s data center division had revenue of $51 billion, beating analysts’ expectations of $49.31 billion. The company reported earnings per share of $1.30, compared to expectations of $1.26. The company also exceeded its forecast for fourth-quarter sales of $65 billion. Analysts expected $61.98 billion.
Nvidia’s stock price rose about 3% in after-hours trading following the results, and rose about 4.5% in after-hours trading after the analyst conference call.
Dan Ives, managing director and senior equity research analyst at Wedbush Securities, wrote after the print edition that “concerns about an AI bubble are greatly exaggerated.” The tech bull called the results a “champagne popping moment” for tech investors.
“This is another test point for the AI revolution,” Ives wrote. “We’re in the top of the third inning of this AI game.”
Other analysts expressed similar views. Thomas Monteiro be Senior Analyst at Investing.com; Nvidia’s report said both demand and supply chains continue to expand, indicating the AI revolution is “far from peaking.”
Despite concerns that ballooning capital spending, estimated at more than $400 billion across top cloud platforms, could lead to an economic slowdown, Monteiro said Nvidia’s numbers show tech companies continue to expand their data centers.
Daniel Morgan, senior portfolio manager at Synovus Trust, said investors remain wary of what he calls the “three Cs”: sustainability of capital spending, circular financing and increased competition.
“While these issues have not been resolved, recent reports give investors confidence that NVIDIA continues to operate at a high level,” he wrote. Nvidia’s results suggest those concerns may “carry over” into at least the next quarter, he added.
Jacob Bourne, a technology analyst at EMARKETER, told Business Insider that while NVIDIA “had another blockbuster quarter,” investors are increasingly focused on how physical constraints such as power availability, land and access to the grid may limit the speed with which hyperscalers can turn GPU power into real revenue.
“Blackwell’s sales are extraordinary.”
Nvidia reiterated on its earnings call that Blackwell and Rubin will have “5 trillion” in chip revenue by 2026.
Chief Financial Officer Colette Kress said things were “progressing well” and “the numbers will continue to rise.”
“We’ll probably get more orders,” she said, noting that new customers, including Anthropic following recent deals, will increase demand. “There is definitely an opportunity to get even more on top of the $500 billion we announced,” she added.
Huang made headlines at NVIDIA’s October GTC conference when he revealed that the company has $500 billion worth of AI chip orders booked in 2025 and 2026, including orders for Blackwell and Rubin chips.
At Nvidia’s financial results announcement, Jensen Huang said, “Blackwell’s sales are extraordinary, and cloud GPUs are sold out.”
Jefferies analysts said Nvidia’s Blackwell GB300 GPU sales, which account for two-thirds of Blackwell sales, were “very strong.”
“NVIDIA answered the bell with GB300 shipments significantly exceeding expectations,” they wrote. They said Nvidia’s results “should help steady the ship” for AI stocks heading into the end of the year.
“Comments about cloud service providers being sold out across the board and Blackwell, Hopper, and even Ampere being maxed out should help end the longevity debate,” the analyst added.
AI bubble chatter
Nvidia’s CEO began his remarks Wednesday by taking aim at the “AI bubble” chatter.
“There’s a lot of talk about an AI bubble,” said Huang, a longtime AI bull. “From our perspective, it looks very different. Just to be clear, Nvidia is different than other accelerators. We excel at every stage of AI, from pre-training and post-training to inference.”
Some technology leaders have warned that AI may be in bubble territory.
Microsoft co-founder Bill Gates said in October that the market could be in the midst of an AI bubble.
“The value is very high, in the same way that building the Internet ultimately made things very valuable on the net,” Gates said on CNBC’s “Squawk Box.” “But you’re in a frenzy. And some of these companies will be glad they spent this much money. Some of them will commit to data centers where power prices are too high.”
“There’s a lot of stuff that gets stuck in these investments,” he added.
Some, like Hwang, reject the AI bubble narrative.
Former Google CEO Eric Schmidt said in July that while the AI craze may resemble a bubble, that doesn’t mean it’s actually a bubble.
“Based on my experience, I think this is unlikely to be a bubble,” Schmidt said while attending the RAISE summit in Paris. “It’s much more likely that we’ll see entirely new industrial structures.”
