‘AI is not a bubble’, Nvidia hints as it posts staggering $57 billion Q3 revenue and strong outlook

Nvidia may or may not come out as the winner in the AI race. But it sure knows how to play the numbers game. On Wednesday, the chipmaking giant posted its third-quarter revenue of a staggering $57 billion, up 62 per cent year-on-year. Suffice to say, US markets on Wednesday reacted favourably to it, sending Nvidia stock 4 per cent up in US after-hours trading. By Thursday morning (in the US), Nvidia shares surged 5.5 per cent in premarket trading.

"There's been a lot of talk about an AI bubble. From our vantage point, we see something very different," Nvidia CEO Jensen Huang said in the quarterly earnings call.

The latest earnings numbers confirm the real-world impact of the tech industry's transition to an AI-driven world. Nvidia's growth is primarily fueled by the company's Data Centre segment, which achieved a record $51.2 billion in revenue, on the back of accelerated computing, AI models, and "agentic applications". In contrast, Nvidia's Gaming segment just brought in a little short of $4.2 billion. 

Nvidia is clearly an AI data centre company first, and gaming hardware is not really even a major part of its topline.

Nvidia lifts Asia tech stocks

This renewed market climate on AI had a butterfly effect, sending shares of data centre firms and AI companies across the globe to new highs. Thursday saw the BSE Sensex gain 446 points to settle at 85,632.68 while the NSE Nifty closed 139 points higher at 26,192.15. Japan's Nikkei index crossed into the 50,000 mark to turn around a four-session slide, closing 2.6 per cent higher. Taiwanese giant TSMC, Nvidia's primary silicon supplier and the world's largest chipmaker, saw its shares jump around 4.3 per cent.

The massive increase in overall revenue directly translated into unprecedented earnings. The company reported GAAP net profit of $31.9 billion for the third quarter, up 65 per cent. 

In the earnings call, Colette Kress, Executive Vice President and Chief Financial Officer, noted: "Demand for AI infrastructure continues to exceed our expectations. The clouds are sold out and our GPU installed base, both new and previous generations, including Blackwell, Hopper and Ampere, is fully utilised."

But it was not just that. CFO Kress went on to provide some detailed outlook for the current fourth quarter. "Total revenue is expected to be $65 billion, plus or minus 2 per cent," added the CFO, "At the midpoint, our outlook implies 14 per cent sequential growth driven by continued momentum in the Blackwell architecture. Consistent with last quarter, we are not assuming any data centre compute revenue from China. GAAP and non-GAAP gross margins are expected to be 74.8 per cent and 75 per cent, respectively, plus or minus 50 basis points."

However, Kress stressed a possible jump in input costs going into fiscal 2027. "GAAP and non-GAAP operating expenses are expected to be approximately $6.7 billion and $5 billion, respectively," they added.

The company is preparing for continued expansion, announcing multi-billion-dollar supply chain commitments and significant investments in major AI developers like Anthropic and OpenAI to expand the AI ecosystem. 

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