Riding the AI wave, Nvidia looks set to stay on the high-growth path

After delivering strong results for the third quarter, Nvidia Corporation (NASDAQ: NVDA) this week said the launch of its new-generation Blackwell chip is on track. The company is thriving on the soaring demand for its high-powered artificial intelligence chips that drive the world’s most advanced AI models like ChatGPT.

Despite reporting stronger-than-expected third-quarter numbers, the GPU giant’s stock slid this week as the market reacted negatively to management’s cautious guidance. NVDA has nearly tripled since the beginning of the year, becoming one of the fastest-growing Wall Street stocks that consistently outperformed the broad market. The stock hit an all-time high of $148.88 early this month. Given the stock’s significant growth potential, even after the recent rally, it is unlikely to disappoint long-term investors.

Blockbuster Results

In the third quarter, the tech firm’s adjusted profit more than doubled to $0.81 per share from $0.40 per share a year earlier. Unadjusted net income was $19.3 billion or $0.78 per share in Q3, compared to $9.24 billion or $0.37 per share in the year-ago quarter. The bottom line benefited from a 94% surge in revenues to $35.1 billion in the October quarter from $18.12 billion a year earlier.

The results exceeded the market’s projections, continuing the long-term trend. The impressive top-line performance mainly reflects strong revenue growth in the Data Center and Gaming segments, catalyzed by double-digit growth across all other operating segments. Meanwhile, overall performance declined from the prior quarters, dampening investor sentiment. As AI chip demand accelerates every quarter, fueling Nvidia’s revenue growth, the market’s expectations for the company also increase.

The tech world will be keeping a close watch on the much-hyped launch of Nvidia’s next-generation chip called Blackwell, an advanced GPU architecture that enables high-performance computing for training and inference in generative AI.

Guidance

For the fourth quarter of 2025, the company expects revenues to be approximately $37.5 billion, which incorporates the growing demand for its Hopper architecture and the initial ramp of Blackwell products. The guidance is slightly below analysts’ consensus revenue estimate of $38 billion for the Q4. Gross margin and operating expenses are expected to be around 73% and $4.8 billion, respectively, in the December quarter. Currently, investments in the business include building data centers for the development of hardware and software stacks and to support new introductions.

From Nvidia’s Q3 2025 earnings call:

“Just like we generate electricity, we’re now going to be generating AI. And if the number of customers is large, just as the number of consumers of electricity is large, these generators are going to be running 24/7. And today, many AI services are running 24/7, just like an AI factory. And so, we’re going to see this new type of system come online, and I call it an AI factory because that’s really as close to what it is. It’s unlike a data center of the past. And so, these two fundamental trends are really just beginning.”

Extending their post-earnings weakness, Nvidia shares traded lower in the early hours of Thursday’s session. The stock’s last closing price of $145.89 is well above the 52-week average value of $98.43.