Nvidia is set to release its highly anticipated third-quarter results after Wednesday’s closing bell, marking its first earnings update since the company briefly surpassed a $5 trillion valuation. The announcement arrives at a time when unease is spreading across the AI sector, with investors questioning whether rapid growth and lofty valuations may be pushing the market into bubble territory. Nvidia’s stock slipped nearly 3% on Tuesday and is down about 12% from its most recent peak.
Despite strong results from other major tech players, Nvidia remains the most influential indicator of sentiment in the AI industry. Analysts warn that even a slight deviation from expectations could ripple through the broader market. Data from an options analytics firm suggests the chipmaker’s valuation could swing by as much as $320 billion following the report, which would mark its most dramatic post-earnings move to date.
According to one industry expert, Nvidia faces a dilemma regardless of the outcome. Strong guidance could heighten fears of excessive capital spending in the AI race, while a more measured outlook may spark concerns that growth is slowing sooner than anticipated.
The earnings release also follows the complete exit of several major investors from Nvidia’s stock positions, as they redirect funds toward emerging AI ventures. At the same time, renewed projections from leading chip competitors suggest the data-center market may expand toward a trillion-dollar scale by the end of the decade.
As attention turns to Nvidia’s performance, investors are especially focused on how much revenue continues to depend on major cloud providers. Around half of the company’s data-center income traditionally comes from large-scale cloud platforms, but rising competition from alternative AI processors has raised questions about whether this dependency poses long-term risks.
The broader AI rally has also faced criticism from prominent market voices, with some arguing that companies may be overstating profits by minimizing equipment depreciation costs. These concerns have added pressure on Nvidia as it heads into what could be one of its most consequential earnings events.
For the third quarter, analysts expect adjusted earnings per share of $1.26 and revenue of $55.2 billion—representing year-over-year increases of 55% and 57%. Data-center operations are projected to deliver more than $49 billion of that total, while gaming revenue is estimated at $4.4 billion. Profit margins are expected to dip to roughly 73.6%, slightly below last year’s levels.
Nvidia has also reiterated that it is not forecasting any contribution from China due to the ongoing technology export restrictions. Hopes for a breakthrough in trade discussions have faded in recent weeks, with no significant progress following high-level talks in Asia.
As the market awaits Nvidia’s latest update, the stakes are higher than ever. The results will not only shape the company’s immediate trajectory but may also set the tone for the next phase of the global AI boom.
