TLDR
- Nvidia reported Q3 revenue of $57 billion, up 62% year-over-year, beating Wall Street’s $54.9 billion estimate
- Adjusted earnings per share came in at $1.30, exceeding the consensus estimate of $1.26
- Nvidia forecast Q4 revenue of $65 billion, above analyst expectations of $62.2 billion
- Stock gave back gains after hitting $196 intraday, closing down 0.5% at $185.60 on Thursday
- Commerce Department approved sale of up to 70,000 advanced AI chips to UAE and Saudi Arabia companies
Nvidia shares couldn’t hold onto their gains Thursday despite posting another earnings beat that topped Wall Street expectations. The stock opened strong but finished down 0.5% at $185.60 after touching $196 earlier in the session.
The chip maker reported adjusted earnings per share of $1.30 for fiscal Q3, beating the consensus estimate of $1.26. Revenue hit $57 billion, a 62% jump from last year that surpassed expectations of $54.9 billion.
CEO Jensen Huang pushed back against bubble concerns during the earnings call. “There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different,” he told analysts.
Sales of Blackwell hardware are “off the charts,” according to Huang. CFO Colette Kress added that chips sold six years ago are still being fully utilized by customers, addressing concerns about accelerated depreciation schedules.
The company guided Q4 revenue to $65 billion at the midpoint, well above the $62.2 billion consensus. This forecast implies 65% growth and doesn’t include any revenue from China. Beijing has been pressuring local companies to stop buying Nvidia processors.
Analyst Response
Melius Research analyst Ben Reitzes raised his price target to $320 from $300. He noted the strong read-through for the sector based on extended chip lifespans. “The read across is great for the sector since it points to very strong spending from hyperscalers and sovereigns outside of China through 2026,” Reitzes wrote.
D.A. Davidson’s Gil Luria maintained a Buy rating with a $250 target. He highlighted management’s confidence in delivering more than $500 billion in cumulative revenue from Blackwell and next-generation Rubin chips through 2026.
The new average Wall Street price target following earnings is $248, implying 33% upside from Wednesday’s close.
Broader Market Weakness
The wider chip sector struggled to maintain momentum. Advanced Micro Devices dropped 4.2% while the iShares Semiconductor ETF fell 2.1%. The S&P 500 declined 0.3% after starting the day higher.
Micron Technology took the biggest hit, falling 7.7%. Intel slipped 0.4% and Qualcomm lost nearly 1%. Broadcom was among the few gainers, rising 0.8%.
Chip equipment makers also pulled back. Applied Materials dropped 2.9%, while Lam Research and KLA Corp fell 1.9% and 2.3% respectively. The Philadelphia Semiconductor Index finished down 1.4%.
The Commerce Department approved Nvidia’s sale of up to 70,000 advanced AI chips to companies in the United Arab Emirates and Saudi Arabia. The deal allows U.S. companies to sell up to 35,000 GB300 servers to both G42 in Abu Dhabi and Humain in Saudi Arabia. While the allocation is relatively small, it signals potential for bigger Middle East sales ahead.
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