Nvidia reports 63% jump in net revenue in Q3 despite AI bubble worry

Nvidia on Wednesday beat fears of an ‘AI bubble burst’ and reported better-than-expected quarterly sales growth of 62 per cent and record data centre revenue of $51 billion at 66 per cent growth year-on-year.

Nvidia CEO Jensen Huang the company has “entered the virtuous cycle of AI” and the peak had not yet come.

“The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once,” said Huang.

Nvidia is the world’s most valuable company with the market cap of $5.4 trillion. Last month, it became the first company to reach $5 billion in market cap.

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Ahead of the earnings report, analysts and industry leaders were concerned that an underwhelming report could ripple through the entire artificial intelligence (AI) ecosystem and lead to a crash. Without naming Nvidia, which has become the world leader in GPUs that AI needs to train and run, Alphabet CEO has warned that while AI investment boom had been an “extraordinary moment” but there was some “irrationality” in it.

Nvidia beats expectations, AI boom not near its peak

Nvidia’s sales grew 62 per cent year-on-year to $57 billion in the August-October quarter — ahead of the $54.9 billion projected by Wall Street.

Nvidia’s profits were up 65 per cent year-on-year at $31.9 billion.

Huang said that the sale of Nvidia’s most advanced chips, Blackwell, was “off the charts”.

For the fourth quarter, Nvidia said it expected to make around $65 billion.

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Nvidia’s performance showed that the AI boom was nowhere its peak irrespective of fears about a bubble bust.

“This answers a lot of questions about the state of the AI revolution, and the verdict is simple: it is nowhere near its peak, neither from the market-demand nor the production–supply-chain sides for the foreseeable future,” Thomas Monteiro, a Senior Analyst at Investing.com, told CNN.

By the end of the decade, Nvidia said it could have $3-4 trillion of annual AI infrastructure on the back of deals with the likes of Saudi Arabia and Anthropic.

Nvidia’s performance also dashed fears at least for now about ‘circular deals’ between AI companies and chipmakers like Nvidia.

In one such deal, Nvidia has invested $100 billion into ChatGPT-maker OpenAI in exchange of chip purchases. Similarly, Claude-maker Anthropic has announced the purchase of $30 billion in computing capacity from Microsoft Azure, which run on Nvidia chips, in exchange for an investment from both the companies.