Another quarter, another report of record revenue growth for Nvidia. This week, the company posted $57 billion in revenue for Q3, a 62% increase from the same period last year and a 22% increase from Q2. These results surpassed previous analyst forecasts, and Nvidia told investors it expects the current pace of spending to continue into the next quarter.
The strength came from Nvidia’s data center business, which brought in $51.2 billion for the quarter. That segment grew 66% YoY as cloud providers and enterprise customers have continued to invest in Nvidia GPUs and networking hardware. The company noted that data center revenue rose 25% from Q2, which is a figure that analysts have been watching closely as a sign of whether AI infrastructure spending is slowing down or still growing. In its forecast for the current fiscal quarter, Nvidia told investors it expects $65.4 billion in total revenue, plus or minus 2%.
Nvidia’s Blackwell Ultra chip (Source: Nvidia)
These results arrive as investors question whether the market has grown too optimistic about the impact of AI on near-term revenue. Several of the largest tech companies, including Microsoft, Meta and Google, have recently raised their capex plans for data centers, and Nvidia’s results indicate that these increased budgets are translating into substantial orders for chips and systems. Nvidia shares rose 4% in after-hours trading following the announcement and were up 4.5% in morning trading today.
In an earnings call, Nvidia executives told analysts they see no indication that demand is slowing, with CEO Jensen Huang refuting the idea of an AI bubble, saying, “We see something very different,” while noting the company has $500 billion in bookings through 2026. Huang went on to say Nvidia is still in the early stages of a long transition in computing and referenced strong interest in the company’s newest Blackwell products, Blackwell Ultra. Chief financial officer Colette Kress highlighted new data center agreements involving partners such as Saudi Arabian state-backed AI firm Humain and the startup Anthropic, saying these projects will contribute to future quarters once systems are delivered.
Huang’s visibility in the high performance computing world has also been high this month. In a surprise stop at the SC25 conference in St. Louis, the CEO made an unannounced visit to Nvidia’s booth, drawing crowds as he greeted attendees, handed out autographed cups, and gave DGX Spark systems to 10 lucky attendees in a show-floor giveaway. Reports noted that he spent time speaking with researchers and students at the show, reinforcing Nvidia’s interest in the scientific and technical communities that depend on its hardware to build large-scale systems. The appearance came only a day after Nvidia’s earnings release, adding to the sense that the company is strengthening its role across both the AI and HPC markets.
Jensen Huang at SC25 this week in St. Louis (Source: Nvidia)
However, these Q3 financial results could also reveal some of Nvidia’s ongoing risks. Four major customers accounted for 61% of company revenue in Q3, up from 56% in Q2, according to a Reuters financial columnist. This raises concerns about how much Nvidia depends on a small group of hyperscale customers. Nvidia also said its outlook does not include any mature data center compute revenue from China because of export restrictions, which have shifted the company’s expectations for the region.
Recent market activity adds another layer of uncertainty. Nvidia’s shares have pulled back more than 10% since reaching a record high in late October, and several high-profile investors have reduced their positions, including the Japanese investment group SoftBank and billionaire tech investor Peter Thiel. Analysts note that the stock’s reaction to earnings has also become more muted this year, which has fueled debate over whether the AI market as a whole is losing momentum.
Back to the results, Nvidia’s free cash flow rose 31% to $22.1 billion. The company now holds about $60 billion in cash and has used more than $12 billion per quarter to repurchase its own stock. The company has also continued to invest in AI-related startups and data center projects, which it says will support demand for its products over time. Nvidia’s growth stands out in comparison with AMD, which reported 36% revenue growth in its most recent quarter. Nvidia also reported gains from its networking hardware products, which generated more than $8 billion in revenue.
For now, Nvidia’s performance suggests that AI infrastructure spending remains strong and that customers plan to continue building larger systems. Upcoming quarters will show whether this momentum will continue or if it will begin to settle down.
The post Nvidia Sees Strong Q3 and Higher Demand Ahead Despite Market Concerns appeared first on AIwire.
