NVIDIA continues to rise.

Despite external turmoil, NVIDIA's stock price still increased after the release of its earnings report.

This is a rather impressive earnings report, with strong performance in overall quarterly revenue, profit, and the key business segment of data centers. Jensen Huang even stated that NVIDIA has $500 billion in undelivered chip orders, and all cloud GPUs are sold out.

The most noteworthy point is that Huang addressed concerns about an AI bubble during the conference call, stating that he does not see any bubble present.

NVIDIA's earnings report has attracted significant attention, largely due to the divergence of opinions in the market. On one side, there are large short positions led by figures like Michael Burry, the prototype of the character in "The Big Short." On the other side, there is optimism and buy recommendations from investment banks like DA Davidson, which previously shorted NVIDIA.

NVIDIA finds itself caught between these polarized judgments. It seems increasingly difficult for the market to reach a consensus on NVIDIA's prospects or the future of the entire AI industry.

01

Let's take a look at NVIDIA's earnings report.

NVIDIA released its earnings report for the third quarter of fiscal year 2026, ending on October 26 of this year.

The report is filled with good news, with revenue and profit exceeding analysts' expectations, and the company maintains an optimistic outlook for the future.

The report shows that NVIDIA's revenue for the third quarter was $57.01 billion, far exceeding the analyst estimate of $54.92 billion; the company's net profit reached $31.91 billion, a year-on-year increase of 65%.

On an adjusted basis, NVIDIA's earnings per share for the third quarter were $1.30, while the previous market estimate was $1.25.

Specifically, the data center remains NVIDIA's pillar, and this time its performance has once again reached a historical high.

In the third quarter, data center revenue was $51.2 billion, accounting for nearly 90% of total revenue, with a year-on-year growth of 66%, far exceeding the analyst estimate of $49 billion. Within the data center business, the "compute" segment contributed significantly, generating $43 billion in revenue.

This growth was primarily driven by sales of the GB300 series chips. The GB300 is NVIDIA's next-generation AI computing platform, equipped with 72 Blackwell Ultra AI GPUs and 36 Grace CPUs based on the Arm Neoverse architecture, officially announced in May this year and began mass production in the third quarter.

During the conference call, NVIDIA's Chief Financial Officer Colette Kress revealed: "Sales of the GB300 have surpassed those of the GB200, contributing about two-thirds of Blackwell's total revenue. The transition to the GB300 has been very smooth."

In addition to "compute," the "network" segment in the data center business also contributed $8.2 billion in revenue.

According to the report, in the third quarter of fiscal year 2026, NVIDIA's other businesses, while not a large proportion, also showed positive results. For instance, the gaming business had quarterly revenue of $4.3 billion, a year-on-year increase of 30%; professional visualization revenue was $760 million, a year-on-year increase of 56%; and the automotive and robotics business contributed $590 million in revenue, a year-on-year increase of 32%.

To understand how crazy all this is, consider the wave of AI before it. Three years ago, in November 2022, NVIDIA released its earnings report for the third quarter of fiscal year 2023, with quarterly revenue of $5.93 billion, a year-on-year decline of 17%. In other words, in three years, NVIDIA's quarterly revenue has ballooned to ten times its size.

It can also be said that NVIDIA's total revenue three years ago was equivalent to about 10% of its current revenue, excluding the core data center business.

02

As soon as NVIDIA's earnings report was released, the market responded positively, with the stock price rising more than 5% in after-hours trading.

This is not easy; NVIDIA's earnings report has garnered significant attention, primarily due to unprecedented concerns about an AI bubble.

Judgments about NVIDIA's future are polarized.

On one hand, many institutions are optimistic about NVIDIA, choosing to buy or give positive forecasts.

The most dramatic shift came from investment bank DA Davidson, which suddenly upgraded NVIDIA's rating from "hold" to "buy" and raised its target price from $195 per share to $210 per share.

This represents a significant change in attitude, as DA Davidson had previously been bearish on NVIDIA, with analysts warning that NVIDIA's stock price could plummet by as much as 48%.

In the new report, DA Davidson stated: "Our increasingly optimistic view on the growth of AI computing demand has replaced our concerns about NVIDIA."

On the other hand, contrary voices are also numerous.

The most attention-grabbing is Michael Burry, the prototype character from the movie "The Big Short," whose firm, Scion Asset Management, has taken a large short position against NVIDIA.

Burry himself broke a two-year silence by posting on X, with an image of his character from "The Big Short" staring at a computer, captioned: "Sometimes we can see the bubble. Sometimes we can do something about it. Sometimes the only way to win is not to play."

Although he did not explicitly state what the "bubble" refers to, it is widely believed to point to the AI bubble.

Burry may not necessarily be correct. He successfully predicted the subprime mortgage crisis, but he also warned a few years ago that meme stocks and cryptocurrency buyers would face a "century crash," and was mocked by Musk as a "broken clock" that always signals incorrectly.

But who can ignore the signal that has sounded this time? Especially now, as the theory of an AI bubble intensifies, NVIDIA, as the "hub" of the entire Silicon Valley AI industry, is under the spotlight with every move it makes.

03

NVIDIA naturally has to face the external controversies. During this earnings report conference call, questions about the AI bubble were inevitably brought to the forefront.

Huang did not evade or beat around the bush but directly gave a negative response:

"There are many statements about an AI bubble, but from our perspective, the situation is completely different (compared to the internet bubble period). AI is changing existing workloads, and we do not see the existence of an AI bubble."

NVIDIA's confidence lies in the strong sales of GPUs. Huang stated in the earnings report that sales of Blackwell chips far exceeded expectations, and all cloud GPUs are sold out. "Whether for training or inference, the demand for computing power is accelerating and compounding exponentially. We have entered a virtuous cycle of AI."

During the conference call, he also revealed that NVIDIA currently holds $500 billion in undelivered chip orders, with schedules extending to 2026, including the next-generation Rubin processors that will begin mass production next year.

In Huang's view, the AI ecosystem is rapidly expanding, with more new foundational model builders and AI startups emerging across more industries and countries. AI is becoming ubiquitous and omnipotent. Therefore, concerns about an AI bubble are largely unnecessary.

For the future, NVIDIA confidently provides an optimistic forecast.

NVIDIA expects fourth-quarter revenue to be around $65 billion, exceeding analysts' expectations of $61.66 billion.

From the after-hours trading performance of NVIDIA's stock price, it can also be seen that the release of this earnings report, along with the performance during the conference call, has somewhat alleviated the market's tension.

Thomas Monteiro, a senior analyst at Investing.com, commented: "This answers many questions about the current state of the AI revolution, and the conclusion is simple: in the foreseeable future, AI is far from reaching its peak, whether from the perspective of market demand or production supply chains."

However, this does not mean that the tension will dissipate immediately.

Some analysts indicate that this earnings report may not be sufficient to quell concerns about an AI bubble.

NVIDIA significantly increased its investment in leasing back its own chips in the third quarter to rent back from cloud customers who could not lease out their chips. The total amount of these contracts reached $26 billion, doubling from the previous quarter.

Cloud giants, including Microsoft and Amazon, are investing billions of dollars into AI data centers, and some investors believe these companies are "artificially inflating" earnings by extending the depreciable lifespan of AI computing devices (such as NVIDIA chips).

In the third quarter, NVIDIA's business concentration further increased, with its four largest customers contributing 61% of sales, up from 56% in the previous quarter.

The company is also continuously increasing its bets on AI companies, investing billions of dollars into firms that are often also its key customers, raising concerns about the "AI economic cycle dependency."

In addition, there are many uncontrollable factors that may limit NVIDIA. For instance, geopolitical influences; it remains excluded from the Chinese market and is now targeting the Middle East, having recently been approved to export chips worth up to $1 billion there.

Moreover, there are concerns about the actual utilization of GPUs in the future. eMarketer analyst Jacob Bourne stated:

"Although the demand for GPUs remains enormous, investors are increasingly concerned about whether hyperscale cloud providers can actually utilize this computing power quickly enough. The key question is whether physical bottlenecks such as power, land, and grid access will limit how quickly this demand can translate into revenue growth in 2026 and beyond."

The debate surrounding the AI bubble and NVIDIA's future will continue.

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