Nvidia’s (NASDAQ:NVDA) latest earnings offered a strong retort to those wondering if the AI boom is about to fade. The AI semi giant delivered a customary beat-and-raise report, showing that demand for its best-in-class AI chips remains as robust as ever.
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In FQ3, the company saw revenue reach $57 billion, up 62% year-over-year (22% quarter-over-quarter), surpassing the consensus estimate by $1.91 billion. The gains were fueled by the Data Center segment, which delivered another record quarter, generating sales of $51.2 billion, amounting to a 66% YoY uptick.
Adj. gross margin came in at 73.6%, down 140 basis points vs. the year-ago period but up 90 basis points sequentially, reflecting the transition from Hopper HGX systems to full-scale Blackwell data center solutions, with the Blackwell ramp already improving product mix and cost efficiency. At the bottom-line, adj. EPS came in at $1.30, rising 60% YoY, and outpacing the Street’s forecast of $1.26.
This is all taking place against a backdrop in which AI infrastructure demand continues to far exceed supply. Cloud GPU capacity is essentially sold out, with Blackwell, Hopper, and Ampere all running at full utilization. The company also has visibility into roughly $0.5 trillion in Blackwell and Rubin revenue from early this year through the end of CY26.
Looking ahead to the January quarter, management expects revenue of $65.0 billion plus or minus 2%, which represents a 14% QoQ increase and is above the Street’s forecast of $62.3 billion. The company is calling for an adj. gross margin of 75.0% plus or minus 50 basis points, and non-GAAP operating expenses of about $5.0 billion as investment continues across compute, networking, and software platforms. Using this guide, Rosenblatt’s Kevin Cassidy, an analyst who ranks among the top 2% on Wall Street, now sees FQ4 adj. EPS of $1.50, above his earlier estimate of $1.37 and the prior consensus call for $1.44.
The latest results and outlook, says Cassidy, should ease recent investor worries about the AI market slipping into bubble territory. The numbers point to continued strength in AI compute demand, with no signs of a slowdown. “Importantly,” the 5-star analyst went on to add, “there was strong demand for next generation Blackwell Ultra GPUs. The demand is coming from training of models, and inference (applying models) across Cloud, Enterprise and Countries. NVIDIA is on track for launching next generation GPUs in 2HC26. We believe the GPU road map combined with expanding technology innovation around the GPUs will keep the AI market growing. We continue recommending the stock for the company’s leadership position in the AI industry.”
Accordingly, Cassidy reiterated a Buy rating on the shares and raised his price target from $240 to $245, implying the stock will gain 32% in the months ahead. (To watch Cassidy’s track record, click here)
It’s a similar story among the majority of the analyst community; barring 1 Hold and Sell, each, all 37 other recent NVDA reviews are positive, making the consensus view a Strong Buy. Going by the $252.05 average target, a year from now, shares will be changing hands for a 36% premium. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.