Nvidia delivers another surge in revenues and profits, yet the stock stumbles on Wall Street. What’s behind the slip for the AI chip titan?
Nvidia’s latest quarterly results delivered staggering numbers, but fell short of reigniting the stock or easing Wall Street’s immediate concerns about the sustainability of its meteoric growth, with shares up roughly 200% over the past year and YTD.
After closing the previous session down 0.76% at $145.89, Nvidia shares are under pressure on the U.S. stock exchange.
Yet, the revenues and net profits of the American Big Tech, a favorite among growth-oriented investors, both surged, and the outlook for the final quarter of the year surpassed consensus expectations.
The production of next-generation AI (artificial intelligence) chips also continues at full speed, with top customers such as Microsoft, Oracle, and OpenAI now receiving Blackwell chips.
So, with such a slew of positive updates, why aren’t the giant’s shares rallying this time?
The answer lies in comparing the pace of revenue growth that Nvidia posted in its third fiscal quarter of 2025, which ended October 27, to previous quarters.
There’s a clear slowdown that hasn’t gone unnoticed by investors, prompting some to unload shares of this Wall Street darling, which boasts a market capitalization exceeding $3 trillion.
All the Key Numbers from Nvidia: The Revenue Growth Problem
During the third fiscal quarter of 2025, Nvidia’s revenues grew by 94% year-over-year to $35.08 billion, outpacing analysts’ consensus of $33.16 billion.
So far, so good. But the 94% growth rate, impressive as it is, pales compared to previous quarters: +122% in Q2 2025, +262% in Q1 2024, and +265% in late 2023.
This deceleration in annual revenue growth has raised doubts about the sustainability of the AI boom, causing Nvidia’s near-doubling in annual revenues to take a backseat.
However, record revenues from Nvidia’s data center division provided a bright spot, reaching an all-time high of $30.8 billion, buoyed by aggressive AI infrastructure investments from U.S. tech giants like Meta, Amazon (AMZN) and Alphabet.
Net Profits and Guidance on Revenues and Margins
As for net profits, Nvidia reported $19.31 billion, more than doubling year-over-year and exceeding consensus estimates of $17.47 billion.
EPS (earnings per share) came in at $0.81 on an adjusted basis, topping expectations of $0.75.
In terms of guidance, Nvidia projected fourth-quarter revenues of $37.5 billion, with a 2% margin of error, higher than analysts’ $36.9 billion forecast. The company also projected a gross margin of 73–73.5%, slightly down from the just under 75% gross margin in Q3, which had already slipped sequentially.
Blackwell Chips and CEO Huang’s Comments
Demand for Nvidia’s products remains strong, driven by their use in building AI infrastructure. CEO Jensen Huang commented, “The era of artificial intelligence is accelerating, and Nvidia computing is at the center of this transformation.”
The company also emphasized the superior efficiency of its GPU-based systems for HPC and data centers. CFO Colette Kress added during the earnings call that “customers are racing to secure first-mover advantages,” especially Blackwell chips, with Nvidia delivering 13,000 samples so far and ramping up production.
Despite these strong fundamentals, Nvidia’s shares dropped. Analyst Gabriel Debach of eToro explained, “When expectations are sky-high, even small hiccups can feel like a free fall. For Nvidia, record-breaking results aren’t enough to satisfy an increasingly anxious market.”
Debach observed, “Turnover continues to grow, but at a less explosive pace.
Meanwhile, gross margins are expected to decline in Q4, reflecting rising costs tied to Blackwell production.”
Even with Nvidia’s expected Q4 revenue range of $36.75–$38.25 billion, the projected 9% sequential growth rate marks a noticeable slowdown from prior quarters. Debach called this a “luxury problem”: demand exceeding supply is positive long-term but adds near-term uncertainty.
Despite a 3% drop in Nvidia’s stock, some analysts remain bullish.
Bank of America reiterated its Buy rating, while Baird raised its target price to $195 from $150, citing no visible slowdown in AI chip demand.
Analysts agree Nvidia is uniquely positioned to capitalize on AI’s growth. eToro’s Debach noted, “Even with a declining P/E ratio, Nvidia continues to justify high valuations through earnings growth that outpaces share price increases.”
Original article published on Money.it Italy 2024-11-21 11:14:54. Original title: Nessuna paura su azioni Nvidia post-utili. Il titolo salirà ancora secondo gli analisti
