Nvidia released its third-quarter fiscal year 2026 earnings report on November 20, 2025, delivering impressive financial results that nonetheless failed to satisfy investors. Despite revenue reaching $57.0 billion (up 62% year-over-year) and beating analyst expectations of $55.2 billion, the stock declined 3.15% in after-hours trading, reflecting Wall Street’s increasingly stringent standards for AI chip leaders.
Outstanding Financial Performance
According to the official earnings report, Nvidia’s Q3 FY2026 key metrics include:
| Metric | Q3 FY2026 | YoY Growth | Analyst Expectations |
|---|---|---|---|
| Revenue | $57.0B | +62% | $55.2B |
| Earnings Per Share | $1.30 | +103% | $1.26 |
| Data Center Revenue | $51.2B | +90% | - |
| Gross Margin | 74.6% | -0.8% | 75.0% |
Data center business accounted for 89.8% of total revenue, continuing to be the core driver of Nvidia’s growth. CEO Jensen Huang stated in the earnings call that Blackwell chip orders are “off the charts,” with demand far exceeding supply.
Blackwell Architecture Becomes New Growth Engine
Nvidia’s next-generation Blackwell architecture GPU is becoming the new star product in the AI accelerator market. The Blackwell family features:
- GB200 NVL72: Combining 72 Blackwell GPUs with 36 Grace CPUs, delivering 30 times performance improvement for LLM inference compared to previous generation
- Multi-trillion parameter model support: Optimized for training and inference of next-generation ultra-large language models
- Shipments accelerating: Major cloud service providers including Microsoft Azure, Google Cloud, AWS, and Oracle Cloud have begun large-scale deployments
Huang revealed during the earnings call that Blackwell chip production will ramp up throughout fiscal 2026, with Q4 revenue expected to reach $65 billion, again exceeding Wall Street consensus of $62.5 billion.
Market Concerns: Why Did Stock Decline Despite Strong Performance?
Despite excellent earnings, Nvidia’s stock fell 3.15% to $141.98 in after-hours trading, reflecting several market concerns:
1. AI Investment Return Doubts
Major cloud service providers including Microsoft and Google have invested hundreds of billions of dollars in AI infrastructure, but commercial application returns remain unclear. Analysts are concerned that if AI applications fail to generate expected revenue, demand for AI chips may cool.
2. Valuation Concerns
Nvidia currently trades at a P/E ratio of 50 times, significantly higher than the semiconductor industry average of 25 times. Even with 62% revenue growth, some investors believe the valuation is too aggressive.
3. Increased Competition
AMD’s new Instinct MI430X data center GPU features 432GB HBM4 memory with 19.6TB/s bandwidth, posing the most serious challenge to Nvidia’s market dominance in recent years. While Nvidia still maintains technological leadership, competitive pressure is increasing.
4. Gross Margin Pressure
Q3 gross margin was 74.6%, slightly below analyst expectations of 75.0%, primarily due to new product ramp-up costs and changes in product mix. Though still among the highest in the industry, the downward trend has raised concerns.
Industry Impact and Outlook
Nvidia’s earnings report has significant implications for the entire AI industry:
Supply Chain Impact: Nvidia’s strong demand will drive growth in HBM memory suppliers (SK Hynix, Samsung, Micron) and advanced packaging service providers (TSMC CoWoS).
Competition Intensification: AMD, Intel, and emerging AI chip startups will intensify R&D investments to challenge Nvidia’s dominance.
AI Application Acceleration: Massive AI infrastructure investment will accelerate the implementation of commercial AI applications, particularly in vertical industries such as autonomous driving, drug discovery, and financial services.
Looking ahead to Q4 fiscal 2026, Nvidia guides for revenue of $65 billion (±2%), indicating the company expects Blackwell product ramp-up to continue driving revenue growth. However, the market’s stringent demands on Nvidia also reflect uncertainties about the long-term development of the AI industry.
For investors, Nvidia remains the core beneficiary of the AI revolution, but the stock’s high valuation requires the company to continuously deliver exceptional performance. For the industry, Nvidia’s success will continue to drive innovation and competition in AI chips, accelerating the arrival of the AI era.
