Nvidia has raised expectations for its fourth-quarter revenue, signaling that demand for artificial intelligence chips from cloud providers remains robust even as questions about an AI-driven market bubble intensify.
The company forecasts sales of $65 billion, plus or minus 2 percent, comfortably above analysts’ consensus estimate of $61.66 billion, according to LSEG data. The announcement marks a pivotal moment for Wall Street, which has been watching Nvidia closely as a bellwether for the broader AI investment frenzy. Over the past three years, Nvidia shares have soared more than 1,200 percent, only to face an 8 percent pullback in November amid mounting skepticism over whether AI valuations have outpaced the underlying business fundamentals.
“The AI ecosystem is scaling fast with more new foundation model makers, more AI start-ups across more industries and in more countries. AI is going everywhere, doing everything, all at once,” said CEO Jensen Huang in a statement, reflecting the company’s confidence in the accelerating demand.
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Much of Nvidia’s growth is driven by its data-center segment, which generated $51.2 billion in revenue in the quarter ending October 26, surpassing expectations of $48.62 billion. But analysts caution that factors outside the company’s control could limit how quickly demand translates into revenue. “While GPU demand continues to be massive, investors are increasingly focused on whether hyperscalers can actually put this capacity to use fast enough,” noted Jacob Bourne of eMarketer. Bottlenecks in power, land, and grid access could slow the deployment of AI infrastructure in the coming years.
Nvidia’s business has also grown increasingly concentrated, with four customers accounting for 61 percent of sales in the last quarter. Meanwhile, the company has expanded its practice of renting back chips from cloud providers—contracts totaling $26 billion, more than double the previous quarter’s $12.6 billion—raising questions about long-term sustainability.
Yet underlying demand remains strong. Nvidia says it has $500 billion in bookings for advanced AI chips through 2026, reflecting continued investment from major tech firms building multibillion-dollar AI data centers. Microsoft, for instance, reported nearly $35 billion in capital expenditures in its most recent fiscal quarter, much of it devoted to chips.
For the fourth quarter, Nvidia anticipates an adjusted gross margin of 75 percent, slightly above the market expectation of 74.5 percent, reinforcing the company’s position at the center of the AI boom.