NVIDIA Corporation has once again proven its dominance in the AI chip market, delivering blockbuster third-quarter results that far exceeded Wall Street expectations. The company reported earnings per share of $1.30 on revenue of $57 billion, marking a 62% year-over-year surge driven primarily by explosive demand in its data center segment. As investors cheered the news, NVIDIA’s stock jumped nearly 5% in after-hours trading, underscoring the company’s pivotal role in the ongoing AI revolution.
Stellar Financial Performance
NVIDIA’s Q3 fiscal 2026 results showcased remarkable growth across key metrics. Data center revenue alone hit a record $51.2 billion, up 66% from the previous year and surpassing analyst forecasts of $49.09 billion. This boom was fueled by sales of advanced GPUs, with compute revenue reaching $43 billion and networking products contributing $8.2 billion, reflecting the rapid adoption of AI infrastructure by hyperscalers and enterprises worldwide. Gross margins held strong at 73.4% on a GAAP basis, highlighting NVIDIA’s ability to maintain profitability amid soaring demand for its Blackwell architecture.
The earnings report also revealed net income of $31.91 billion, a testament to the company’s efficient scaling in AI-driven workloads. CEO Jensen Huang emphasized during the earnings call that Blackwell sales are “off the charts,” with cloud GPUs completely sold out, signaling sustained momentum into the next quarter. Looking ahead, NVIDIA guided for $65 billion in Q4 revenue, plus or minus 2%, easily topping estimates of around $62 billion and reinforcing investor confidence in its growth trajectory.
Data Center Boom: The AI Engine
At the heart of NVIDIA’s success is its data center business, which now represents the bulk of its revenue and is propelled by the insatiable hunger for AI computing power. The segment’s 66% year-over-year growth underscores a shift toward accelerated computing, where GPUs outperform traditional CPUs in handling complex AI tasks like training large language models and real-time inference. Key contributors include initial shipments of the GB300 chips and the NVLink networking fabric, which enables massive GPU clusters to operate seamlessly as unified systems.
This surge aligns with broader industry trends, as cloud providers and AI startups ramp up investments in next-generation infrastructure. NVIDIA’s CFO Colette Kress noted that AI agent workloads and foundation model builders are driving half of the long-term opportunity, with enterprises leveraging the technology for productivity gains and cost reductions. The company announced AI factory projects totaling 5 million GPUs, spanning cloud service providers, sovereign entities, and supercomputing centers, further solidifying its ecosystem dominance.
Stock Surge and Market Reaction
NVIDIA’s stock price reacted swiftly to the earnings beat, climbing about 5% in extended trading to around $185 per share, recovering from recent dips amid broader market volatility. The NVDA stock has been under scrutiny following a 1,200% rally over the past three years, but this quarter’s results alleviated concerns about slowing growth. Analysts from firms like Jefferies and Truist raised price targets to as high as $255, citing the company’s reaccelerating revenue and strong visibility into $500 billion in Blackwell and Rubin orders through 2026.
While NVIDIA’s performance outshone peers, related stocks like AMD showed mixed responses, with its share price dipping slightly as investors weighed competitive dynamics in the AI chip space. The broader Nikkei 225 index edged higher on tech strength, though Google share price remained stable amid its own AI investments. Overall, the market views NVIDIA’s results as a validation of the AI spending cycle, with Wall Street now projecting the company could reach a $6 trillion market cap in the coming years.
Huang’s Bold Stance on AI Bubble Fears
CEO Jensen Huang directly addressed mounting speculation about an “AI bubble” during the earnings call, dismissing it as misguided and pointing to profound industry transformations. “There’s been a lot of talk about an AI bubble,” Huang stated. “From our vantage point, we see something very different.” He outlined three key dynamics: the migration of core workloads like search, recommendations, and engineering to GPUs; the creation of entirely new AI applications; and the rise of “agentic AI” systems that reason and act autonomously, demanding even more compute resources.
Huang argued that NVIDIA is uniquely positioned to capitalize on these shifts, excelling at every stage of AI development from inference to training. He highlighted real profits and quality revenue as evidence against bubble fears, contrasting the current AI boom with past tech cycles. Investors echoed this optimism, with analysts like those at Melius Research boosting targets to $320, emphasizing gross margin expansion and capex spending through the decade.
Future Outlook and Industry Implications
NVIDIA’s Q3 triumph positions it as the undisputed leader in AI hardware, with projections for fiscal 2027 showing sustained mid-70s gross margins despite rising input costs. The company anticipates $350 billion in data center revenue visibility over the next several quarters, driven by hyperscale expansions and enterprise adoption. Challenges like U.S. export restrictions to China were noted, but NVIDIA expects no significant compute revenue from that market, focusing instead on global AI ecosystems.
As AI permeates industries from gaming to automotive—where revenue grew 30% and 32% respectively—NVIDIA’s innovations like the Hopper H200 and upcoming Rubin architecture promise further breakthroughs. This earnings report not only crushes short-term doubts but also paints a picture of enduring growth, making NVDA stock a focal point for investors tracking the AI narrative.
