Nvidia Q3 Results: Third Quarter Revenue Surges on AI Demand
Nvidia once again posted impressive performance in the third quarter, but uncertainty over its business in China has cooled investor enthusiasm for AI stocks. While the company announced record revenue guidance and fresh investments to strengthen its long-term prospects, U.S. trade policy and China’s unpredictable stance have weighed heavily on overall market sentiment. Here is a detailed look at Nvidia’s latest results and what they mean for investors.
Revenue and Growth: AI Drives Momentum
According to the recently released third-quarter results, Nvidia reported $46.7 billion in revenue, surpassing Wall Street expectations. Its data center unit, which accounts for the largest share of the business, generated nearly $41 billion in turnover, with about half coming from the world’s top cloud service providers. Nvidia made it clear that global AI demand—especially for sovereign AI and cloud infrastructure—continues to strengthen its growth.
For Q3, the company projected revenue of $54 billion (plus or minus 2%), above analysts’ estimates. On the profitability side, Nvidia guided for a 73.5% gross margin—slightly higher than expectations, reflecting strong operational efficiency.
Business in China: A Major Challenge
Despite solid financials, China remains a pressing concern for Nvidia. Due to the trade war and U.S. restrictions, the company excluded H20 chip sales to China from its Q3 outlook. In recent months, Washington has tightened export controls on high-end AI chips, with frequent regulatory changes making it difficult for companies to predict future earnings from China.
CEO Jensen Huang expressed cautious optimism, saying discussions with the U.S. government may eventually allow smoother sales in China. But until a formal policy framework emerges, Nvidia is treading carefully. This uncertainty directly impacted market sentiment, wiping out nearly $110 billion from the company’s market cap in a single day.
Global Demand and Innovation: Nvidia Maintains Leadership
While challenges persist in China, Nvidia continues to see strong international demand for its H20 chips and the new Blackwell platform. In the last quarter, one major customer booked about $650 million worth of H20 chips, underscoring the product’s strength.
CFO Colette Kress stated that sovereign AI—selling chips and software directly to governments—could generate about $20 billion in revenue this year. Analysts estimate that global investment in AI infrastructure could reach $3 to $4 trillion by the end of this decade, opening massive opportunities for the company.
Investor Concerns: Slower Growth but Confidence Intact
Nvidia’s growth trajectory remains strong, though its data center business showed signs of moderation. Several cloud service providers have adopted a cautious approach toward new large-scale investments, which weighed on data center revenue. This led to a 3.2% drop in Nvidia’s stock, also pulling down rivals such as AMD.
Even so, long-term confidence in Nvidia remains intact. The company announced a $60 billion share buyback program, a clear signal of management’s commitment to shareholder value.
The Road Ahead: Challenges and Opportunities
Nvidia appears well-prepared to navigate shifting market dynamics through its product portfolio and operational strategy. CEO Jensen Huang said, “AI has elevated the ambitions of every industry and every nation. In cloud, agentic AI, and physical AI, we are witnessing the beginning of a new era.”
For now, resolving uncertainty around U.S. trade policy and the Chinese market remains critical. At the same time, sovereign AI, data center expansion, and infrastructure projects worldwide continue to drive strong demand for Nvidia’s products.
Conclusion
Nvidia delivered outstanding performance in terms of value, innovation, and global demand in the third quarter, but uncertainty in China has curbed market excitement. The company’s focus now lies not only on sustaining record earnings and growth but also on adjusting strategies in line with evolving policies. In the coming quarters, AI, cloud, sovereign AI demand, and global market dynamics will determine how quickly Nvidia can scale its growth to the next level.
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