Nvidia Earnings: Key Highlights — Bubble Concerns, Massive Forecasts, and Weak China Demand

Nvidia released its fiscal third-quarter results on Wednesday, beating expectations and offering an optimistic outlook for the next quarter. Investors reacted positively, pushing Nvidia shares higher after the announcement. Other stocks tied to the AI industry also saw gains. The report shows Nvidia’s continued dominance in the market for AI-focused GPUs. CEO Jensen Huang remained confident during the earnings call, highlighting strong demand and long-term growth opportunities. For the current quarter, Nvidia expects revenue of around $65 billion**, representing 65% year-over-year growth**. Below are the major takeaways from the earnings update: --- 1. Nvidia Dismisses AI Bubble Worries During the earnings call, Huang directly addressed investor fears that the surge in spending on AI chips may be unsustainable. He argued that what’s happening in the AI sector is far from a bubble. According to him, three major trends are fueling AI infrastructure investments: * Traditional (non-AI) software increasingly shifting to GPU acceleration * New AI-powered applications emerging * “Agentic AI” systems that operate independently and demand significant computing power Huang said the market will soon better understand the foundation behind current AI investments rather than focusing on simple narratives about rising capital expenditures. Analysts at Bernstein said Huang’s confidence helped ease concerns after a recent drop in AI stocks, noting that investors needed reassurance — and he delivered. 2. “Half a Trillion” Demand Forecast Still On Track Last month, Huang mentioned that Nvidia had $500 billion worth of AI chip orders for 2025 and 2026**. The company confirmed that this projection remains intact. Nvidia added that its current backlog doesn’t even include some of its newest agreements, including partnerships with Anthropic and an expanded deal with Saudi Arabia. CFO Colette Kress said the backlog is expected to grow even further as additional orders come in. Analysts highlighted this massive forecast as a key factor supporting Nvidia’s long-term AI leadership, with some firms suggesting the update should restore confidence in the AI sector heading into year-end. 3. China Sales Were Minimal This Quarter** Earlier this year, Nvidia worked to secure approval to sell its H20 chip — a downgraded version of older GPU technology — to China. Some analysts had estimated China could represent a **$50 billion annual opportunity Although Nvidia received the necessary export licenses after discussions between Huang and U.S. leadership, sales were extremely small. Kress reported only $50 million in H20 revenue for the quarter. She said large orders did not materialize due to geopolitical tensions and growing competition from local Chinese chipmakers. Nvidia continues to argue that allowing the export of advanced GPUs to China would support U.S. national security interests by keeping Chinese developers dependent on American hardware rather than strengthening domestic competitors. The company hopes to eventually gain approval to sell a modified version of its newer Blackwell chips in China. Analysts at Melius said Nvidia’s strong results were even more impressive considering how little it sold in China. They projected the company could generate nearly $400 billion in free cash flow** over the next nine quarters

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