Nvidia Earnings Weigh on Stock After Record Quarter
Nvidia earnings showed record Q3 data center revenue, but shares fell as investors weighed AI-bubble risks, prompting selling despite analyst target raises.
KEY TAKEAWAYS
- Reported record Q3 revenue of $57.0 billion led by $51.2 billion in data center sales.
- GAAP gross margin rose to 73.4%, boosting operating income and cash from operations.
- Shares fell despite analyst target lifts as traders weighed AI-bubble risks and market volatility.
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Nvidia Corp. (NVDA) reported record third-quarter revenue on Nov. 19, 2025, driven by strong data-center demand, but shares fell as broader market volatility and renewed debate over an AI bubble tempered investor enthusiasm.
Record Quarter and Product Expansion
Nvidia reported third-quarter revenue of $57.0 billion for the period ended Oct. 26, 2025, a 22% increase from the prior quarter and 62% higher than a year earlier. Data-center revenue reached $51.2 billion, up 25% sequentially and 66% year-over-year, reflecting strong demand for processors used in large AI workloads.
Profitability improved as GAAP gross margin rose to 73.4%, a one-percentage-point gain from the previous quarter. Operating income increased to $36.0 billion from $28.4 billion, while net cash from operating activities totaled $23.8 billion.
Nvidia introduced new hardware to support ongoing infrastructure buildouts, including the Blackwell GPU, now in volume production at TSMC’s Arizona facility, and the Rubin CPX GPU designed for massive-context processing. The company also announced partnerships to deploy more than 250,000 GPUs with South Korean industrial leaders.
Market Reaction and Outlook
Despite the strong results, Nvidia shares declined after an initial rise as marketwide volatility and skepticism about the sustainability of AI demand weighed on sentiment. Analysts raised their average price target to $250, but selling pressure persisted.
The company provided no specific quarterly or annual revenue guidance. Management, including CEO Jensen Huang and CFO Colette Kress, highlighted ongoing AI infrastructure expansion and new product launches, stating they have visibility to a half a trillion dollars in revenue through 2026.
The quarter illustrated a familiar contrast for investors: robust demand and high margins alongside near-term market caution. Large-scale GPU deployments and new products support Nvidia’s view that AI infrastructure spending will continue to drive sales. However, the disconnect between strong fundamentals and short-term market positioning remains evident.
