Nvidia‘s CEO Jensen Huang on Wednesday downplayed fears of an AI bubble as the company surprised Wall Street with renewed growth after several quarters of slowing sales. The chipmaker’s impressive third-quarter earnings and optimistic forecast for the fourth quarter eased, at least temporarily, investor anxiety that the AI boom may have exceeded its fundamentals. For months, global markets have looked to Nvidia as a key indicator of whether massive investments in AI infrastructure are pushing the industry into bubble territory.
“There’s been plenty of talk about an AI bubble. But from where we stand, we’re seeing something entirely different,” Huang told analysts, highlighting the overwhelming demand from cloud companies for Nvidia’s chips.
“We’re in every cloud. Developers love us because we are literally everywhere,” he added. “From cloud to on-premise to robotics, edge devices, and PCs — one architecture that just works. It’s incredible.”
Huang also reaffirmed last month’s projection that Nvidia has secured $500 billion worth of bookings for its advanced chips through 2026.
Shares of the AI bellwether rose 5% in after-hours trading, positioning the company to gain roughly $220 billion in market value. Before earnings, Nvidia stock had slid nearly 8% in November, following a staggering 1,200% surge over the past three years. Meanwhile, the broader market has fallen almost 3% this month. After Nvidia’s results were released, S&P 500 futures climbed 1%, signaling a strong opening for U.S. markets on Thursday.
Nvidia, currently the world’s most valuable company, forecast fiscal fourth-quarter revenue of $65 billion, plus or minus 2%, beating analyst estimates of $61.66 billion, according to LSEG data. The company also expects an adjusted gross margin of 75%, plus or minus 50 basis points, and CFO Colette Kress said Nvidia aims to maintain mid-70% margins through fiscal 2027.
Third-quarter revenue increased 62%, marking the first acceleration in seven quarters. Data-center sales — Nvidia’s largest business segment — reached $51.2 billion for the quarter ending October 26, exceeding expectations of $48.62 billion.
Nvidia’s strong performance lifted shares of rival AMD and tech giants like Alphabet and Microsoft.
Results May Not Silence Bubble Fears
Despite the upbeat report, some analysts warned that concerns about an AI bubble are unlikely to disappear.
“The worry that AI infrastructure spending can’t grow at this pace sustainably is not going away,” said Stifel analyst Ruben Roy.
In the third quarter, Nvidia sharply increased spending to rent back its own chips from cloud partners — chips those companies have been unable to lease out. These contracts reached $26 billion, more than doubling from the previous quarter.
Tech giants such as Microsoft and Amazon continue pouring billions into AI data centers, prompting some investors to argue that these firms may be artificially boosting earnings by extending the depreciation timelines of costly AI hardware, including Nvidia GPUs.
Nvidia’s revenue has also become more concentrated: four customers accounted for 61% of third-quarter sales, up from 56% in the prior quarter. The company has simultaneously expanded its investments in AI startups — often the same companies that are among its biggest chip buyers — raising concerns about a circular financial ecosystem in the AI sector. In September, Nvidia committed up to $100 billion to OpenAI while also supplying the firm with data-center chips.
“Even with results and guidance exceeding expectations, investors will continue to question whether customer capex can keep rising and whether circular financing in the AI sector is sustainable,” said Kinngai Chan of Summit Insights.
Potential Challenges Ahead
Shut out of China due to U.S. export controls, Nvidia is turning to the Middle East as a new growth market. The U.S. Commerce Department confirmed Wednesday that it approved the export of up to 35,000 Nvidia Blackwell chips to companies in Saudi Arabia and the UAE — a shipment likely worth more than $1 billion.
Yet several factors beyond Nvidia’s control could slow its momentum.
“GPU demand is enormous, but investors are increasingly focused on whether hyperscalers can deploy this capacity quickly enough,” said Jacob Bourne of eMarketer. “Physical limitations in power supply, land availability, and grid infrastructure could restrict how fast this demand converts into real revenue through 2026 and beyond.”
When asked what the biggest constraint on Nvidia’s growth is, Huang gave a lengthy answer emphasizing the scale, novelty, and complexity of the AI industry. He did not name one specific issue but stressed that the industry’s rapid transformation requires careful coordination across supply chains, infrastructure, and financing.