Nvidia stock wavers after Q3 earnings, forecasts top estimates with sales for AI chips 'off the charts'

Nvidia beat Q3 expectations with EPS of $1.30 on revenue of $57.01 billion (vs. $1.26 and $55.2 billion consensus), driven by data-center sales of $51.2 billion, and guided Q4 revenue to $65 billion ±2% versus Street $62 billion as CEO Jensen Huang said Blackwell sales and cloud GPUs are "off the charts" and largely sold out; gaming revenue of $4.3 billion slightly missed estimates. Despite the beat and an upbeat AI-driven outlook that helped Nvidia briefly top a $5 trillion market cap last month, shares fell about 3.2% alongside other mega-cap AI names, while major holders including Peter Thiel's fund and SoftBank trimmed or exited positions. The report reinforces accelerating AI demand and secular expansion of the data-center market but also highlights valuation and investor-skepticism risks amid debates over accounting for data-center depreciation.

Analysis

Nvidia reported Q3 EPS of $1.30 on revenue of $57.01 billion versus Bloomberg consensus of $1.26 and $55.2 billion, with year-ago Q3 EPS and revenue of $0.81 and $35.1 billion respectively; its data-center revenue was $51.2 billion compared with estimates of $49.3 billion while gaming revenue slightly missed at $4.3 billion versus $4.4 billion expected. For Q4 the company guided to revenue of $65 billion ±2%, topping the Street’s $62 billion forecast, and CEO Jensen Huang stated that Blackwell sales are "off the charts" and cloud GPUs are sold out, signaling strong near-term demand. Market reaction was muted to negative as shares closed down 3.15% despite the beat; the report follows recent position exits by Peter Thiel’s fund (~$100 million) and SoftBank ($5.8 billion), and comes after Nvidia briefly eclipsed a $5 trillion market cap. Key risks include valuation and investor skepticism—highlighted by activist commentary (Michael Burry) about data-center depreciation—and the need to monitor supply cadence, competitive dynamics (AMD’s rising data-center emphasis), and China exposure where the H20 chip contribution was deemed "insignificant."

Key Decisions for Investors

• Consider opportunistic buy-on-dip positions in NVDA given the beat and $65bn Q4 guide, but keep position size disciplined due to rich valuation and recent profit-taking
• Monitor upcoming data-center metrics (actual Cloud GPU fulfillment, Blackwell supply cadence and sequential data-center revenue) and any disclosures on data-center depreciation as primary catalysts to validate guidance
• Use hedges or trailing stops if macro-driven mega-cap AI weakness continues or if activist/analyst scrutiny on accounting intensifies, and reassess if major holders continue to exit
• Compare NVDA execution and pricing power versus AMD and watch AMD’s data-center commentary and share trends as a potential downside to Nvidia’s near-term growth premium