Nvidia pushes back on AI bubble narrative as Blackwell drives Q3 beat

Investing.com -- Nvidia posted strong guidance for the current quarter following fiscal third-quarter results that topped Wall Street estimates on Wednesday as the AI arms race continued to drum up demand for its latest AI Blackwell chips. NVIDIA Corporation (NASDAQ:NVDA) stock was up more than 5% in recent after-hours trading following the report and subsequent earnings call, where CEO Jensen Huang eased investor fears of an "AI bubble."

For the three months ended Oct. 26, the company reported Q3 adjusted earnings per share of $1.30, up from $0.78 in the same period a year earlier, on revenue of $57.01B, up 62% from a year ago. Analysts polled by Investing.com anticipated per-share income of $1.25 and revenue of $54.8B.

The company’s data center business, which makes up the bulk of revenue and includes the next-generation Blackwell AI chips as well as prior-generation Hopper AI chips, saw revenue climb 66% to $51.22B, beating estimates of $49.09B.

CFO Colette Kress said Blackwell momentum is driving unprecedented visibility, reiterating that Nvidia currently has “visibility on $500 billion in revenue from the beginning of the year to the end of 2026,” with further opportunities on top of that. She added that roughly half of Nvidia’s longer-term opportunity will come from hyperscalers transitioning to accelerated computing and generative AI.

Blackwell sales were fueled by hyperscalers including Microsoft Corporation (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), and Alphabet Inc Class A (NASDAQ:GOOGL), with Huang saying demand is “off the charts” and cloud GPUs are effectively sold out. Kress later noted that the GB300 chip accounted for about two-thirds of total Blackwell revenue in the quarter.

Networking, which also forms part of the data center business and which Nvidia has touted as a growth engine, saw sales rise 162% from a year ago.

The gaming business, meanwhile, reported a 30% rise in sales to $4.27B. Gross margins fell 1.4 bps to 73.6%, though beat estimates of 73.4%.

China, geopolitics, and chip mix

Kress said sales of Nvidia’s new H20 chip specialized for China totaled about $50M in Q3, while tougher U.S. export rules resulted in “sizable purchase orders” for Hopper-generation products failing to materialize. She added the company was “disappointed” by the new restrictions but remains committed to engaging with regulators.

CEO pushes back on AI bubble narrative

Huang directly addressed growing debate about an AI spending bubble, saying Nvidia is seeing “something different,” driven by three concurrent platform shifts:

1. The move from CPU general-purpose computing to GPU-accelerated computing.

2. AI reaching a tipping point, with generative AI replacing classical machine learning.

3. The transition to agentic AI, which he said most industries haven’t even engaged with yet.

“Don’t just look at hyperscalers… Look at the world. Look at different industries,” Huang said, adding that Nvidia’s inference leadership and the number of customers switching to Nvidia platforms “after exploring others” is increasing.

Huang also emphasized Nvidia’s central position in the ecosystem, noting its platform runs “every major AI model,” including OpenAI, Anthropic, xAI, Gemini, and others. He pushed back on "circular investment" criticism, specifically involving OpenAI, saying the move to invest in the ChatGPT-maker is intended “to expand our ecosystem and support their growth.”

Guidance beats 

Looking ahead, Nvidia said it expected about $65B in fiscal fourth-quarter revenue, plus or minus 2%, beating analyst estimates of about $61.84B. Kress reiterated that Nvidia’s revenue visibility through 2026 exceeds $500B, with room for further upside as more industries adopt agentic AI.

(Luke Juricic also contributed reporting)