Nvidia shares rise on stronger-than-expected revenue, forecast

Nvidia topped fiscal Q3 expectations with adjusted EPS of $1.30 versus $1.25 estimated and revenue of $57.01B versus $54.92B expected, reporting net income of $31.91B (up 65%) and issuing stronger-than-expected Q4 sales guidance of about $65B (vs. $61.66B est), sending shares up over 4% in after-hours trading. The beat was driven by data center sales of $51.2B (up 66% y/y), including $43B in compute (helped by initial GB300 sales) and $8.2B in networking; management said Blackwell Ultra is now the best-selling family, cloud GPUs are sold out and the company has roughly $500B of orders for 2025–26, highlighting sustained hyperscaler AI demand. Gaming, professional visualization and automotive/robotics all showed strong double-digit growth, but Nvidia noted disappointing China shipments due to export and geopolitical issues; it returned capital with $12.5B of buybacks and $243M in dividends, and the results reinforce the vigor of the AI-driven semiconductor cycle and the wider tech capex backdrop.

Analysis

Nvidia beat fiscal Q3 expectations with adjusted EPS of $1.30 versus $1.25 estimated and revenue of $57.01 billion versus $54.92 billion expected, generating net income of $31.91 billion, a 65% year-over-year rise; shares rose more than 4% in after-hours trading on the print and stronger-than-expected Q4 sales guidance of about $65 billion versus $61.66 billion consensus. The quarter was driven by an outsized data center performance: $51.2 billion in data center sales (vs. $49.09B consensus), up 66% year-over-year, including $43 billion in compute revenue and $8.2 billion in networking; management cited initial GB300 sales and said Blackwell Ultra is now the best-selling family. Management highlighted demand durability—stating cloud GPUs are sold out and referencing roughly $500 billion of orders for 2025–26—supporting the company’s central role in the AI capex cycle and reinforcing upside to near-term revenue visibility. Offsets include geopolitical limits into China where H20 licensing produced only $50 million of sales and a statement that current-generation Blackwell chips cannot be shipped there; the company returned $12.5 billion via buybacks and paid $243 million in dividends, which supports EPS but does not mitigate concentration and export risks.

Key Decisions for Investors

• Consider accumulating or modestly increasing NVDA exposure to capture continued data-center-driven revenue upside given $65B guidance and $500B order commentary, while sizing positions to risk tolerance
• Limit concentrated exposure or hedge positions because revenue is highly concentrated in hyperscalers and China export limits (H20 sales only $50M and inability to ship Blackwell), monitor order conversion and hyperscaler end-user adoption closely
• Monitor near-term catalysts—next quarterly update, hyperscaler capex revisions, and execution on GB300/Blackwell Ultra—and use protective hedges or option strategies if relying on near-term price appreciation