Impressive Show
In the third quarter, Nvidia’s adjusted earnings increased sharply to $1.30 per share from $0.81 per share a year earlier. On a reported basis, net income was $31.9 billion or $1.30 per share in Q3, compared to $19.3 billion or $0.78 per share in the year-ago quarter. The strong bottom-line growth reflects a surge in Q3 revenues to a record $57.0 billion from $35.08 billion in the prior-year period. Both revenue and earnings topped expectations. Revenues of the Data Center and Professional Visualization segments climbed 66% and 26%, respectively, while Gaming revenue declined 1%. Automotive and Robotics revenue edged up 1%.
“The transition to accelerated computing is foundational and necessary. Essential in a post-Moore’s law era. The transition to generative AI is transformational and necessary, super-charging existing applications and business models. And the transition to agentic and physical AI will be revolutionary, giving rise to new applications, companies, products, and services. As you consider infrastructure investments, consider these three fundamental dynamics. Each will contribute to infrastructure growth in the coming years. NVIDIA Corporation is chosen because our singular architecture enables all three transitions,” Nvidia’s CEO Jensen Huang said.
Bullish View
Buoyed by the positive outcome, the management issued upbeat guidance. For the fourth quarter, it expects to generate revenues of around $65 billion, representing a 65% year-over-year growth. If the revenue target is achieved, it would be a new record. Reported and adjusted gross margins are expected to be approximately 74.8% and 75.0%, respectively, in the final three months of FY26. The guidance for Q4 operating expense is around $6.7 billion.
Nvidia’s blockbuster financial performance underscores its strategic pivot toward AI infrastructure. The company sees a $500 billion opportunity for its Blackwell and Rubin platforms through 2026. Meanwhile, geopolitical issues continue to impact business in China, an important market for the company. Anticipating the disruption to continue during the remainder of the year, the management said it is not assuming any data center compute revenue from China in Q4.
On Thursday, Nvidia’s stock reversed most of its post-earnings gains and was down 2% in the afternoon. It continues to trade above its 12-month average value of $149.01. NVDA has gained around 36% in the past six months.