Nvidia (Nvidia) announced strong third-quarter financial results on Wednesday (November 19), predicting fourth-quarter revenue to reach around $65 billion, significantly higher than the market’s estimate of about $62 billion. This has provided a strong boost to the global market and temporarily eased concerns about the “bubble” in the artificial intelligence (AI) industry.
Nvidia’s stock price surged over 5% in after-hours trading, lifting the prices of US technology stocks and Asian semiconductor supply chain stocks across the board.
In the third quarter, Nvidia’s revenue grew by 62% to $57 billion, marking the first re-acceleration in seven quarters. Sales in the data center business reached $51.2 billion, surpassing analysts’ estimates of around $48.6 billion to $49.3 billion, far exceeding the $4.3 billion from the gaming sector.
The company also expects a gross margin of 75% for the fourth quarter of this year.
CEO Huang Renxun said during the earnings call, “There has been a lot of discussion about the AI bubble recently. But from our perspective, what we see is completely different.”
He emphasized that the demand for Nvidia chips from major cloud service providers remains strong, and reiterated that the total cumulative order amount for its high-end AI chips will exceed $500 billion by 2026.
Nvidia’s stock price rose over 5% in after-hours trading. AMD, Alphabet, Microsoft, Palantir, and other tech stocks also followed suit in rising.
Following the release of Nvidia’s financial report, S&P 500 index futures rose by 1.2%, Nasdaq 100 futures jumped by 1.7%, indicating expectations for a higher opening of US stocks the next day.
In addition, Bitcoin also rebounded to surpass $92,000, reflecting a revival in sentiment towards risk assets.
Asian stock markets surged in early trading, with Japan’s Nikkei 225 index rising by 4%, South Korea’s Kospi index up by 3.08%, and Taiwan’s Weighted Index up by 3.23%.
Among them, the stock prices of Asian semiconductor suppliers soared, with Taiwan Semiconductor Manufacturing Company (TSMC) rising by 4%, SK Hynix and Samsung Electronics in Korea rising by nearly 4%, and Japan’s Renesas Electronics, Tokyo Electron, and Lasertec all rising by 4% to 6%.
Despite the strong Nvidia financial report, some analysts still caution that the sustainability of AI infrastructure investment growth remains uncertain.
Stifel analyst Ruben Roy told Reuters, “Concerns about the sustainability of AI infrastructure spending growth are unlikely to diminish.”
Analysts pointed out that Nvidia significantly increased spending on “leasing back its own chips to cloud customers” in the third quarter, amounting to $26 billion, double the previous quarter. This dual role of Nvidia as a supplier and lessee has sparked discussions in the market about whether AI demand is being magnified.
Furthermore, cloud giants including Microsoft and Amazon are investing billions of dollars in AI data centers. Some investors believe that these companies artificially boost earnings by extending the depreciation period for AI computing equipment.
Nvidia’s business became more concentrated in the third quarter, with four customers accounting for 61% of its sales, higher than 56% in the second quarter.
Nvidia has also become a significant investor in several AI startups, such as investing $100 billion in OpenAI and supplying data center chips to them, leading to concerns from some investors about the emergence of a “circular AI economy.”
Kinngai Chan, an analyst at Summit Insights, told Reuters, “Despite performance and prospects stronger than market consensus, we believe investors will still worry about the sustainability of increased customer capital expenditures and the phenomenon of circular financing in the AI field.”
Furthermore, Nvidia’s growth potential still faces constraints from geopolitical and physical infrastructure.
Due to export restrictions from the United States, Nvidia’s high-end chips are currently largely excluded from the Chinese market.
Despite huge demand for Nvidia’s GPUs, analysts also worry that bottlenecks such as “power, land, and power grids” may limit the scale of data center construction for cloud providers, affecting revenue growth in 2026 and beyond.
As tech stocks perform strongly, the market remains focused on whether the Federal Reserve’s rate-cutting path will be fully implemented.
With the US Bureau of Labor Statistics not separately releasing the non-farm payroll report for October and incorporating the data into November, Federal Reserve policymakers lack a key economic data point before their last rate decision meeting of the year.
This has led traders to reduce their expectations of a rate cut by the Fed next month, with the market generally expecting policymakers to keep the benchmark rate in the 3.75% to 4% range.
Minutes from the October Fed meeting also indicated that many officials believe maintaining rate stability for the remaining time in 2025 is appropriate.