"Jensen Huang laid out the path on the Q3 earnings call: "I believe that there will be no digestion until we modernize a trillion dollars with the data centers. And let's say by 2030, the world's data centers for computing is a couple of trillion dollars." Nvidia captured 73.4% gross margins on infrastructure powering this transformation. The numbers validate his thesis. Q3 revenue hit $57 billion, up 62.5% year-over-year."
"The Bear Case: Competition and Compression Microsoft just unveiled its Maia 200 chip. Advanced Micro Devices (NASDAQ:AMD) continues gaining ground in the AI chip market. Meta, Amazon, and Google all deploy custom silicon for AI inference. The hyperscalers spending $300 billion annually on infrastructure hate vendor lock-in. Nvidia's beat magnitude is shrinking. The company exceeded estimates by larger margins in early 2024, with the gap narrowing in recent quarters. Analysts are catching up, making future surprises harder. Growth rates have decelerated from fiscal 2025 levels, which matters when trading at 24x forward earnings."
Nvidia reported Q3 revenue of $57 billion, up 62.5% year-over-year, driven by data center demand and 73.4% gross margins on infrastructure. Preproduction Blackwell orders reportedly exceed $10 billion, and CoreWeave received $2 billion to build over 5 gigawatts of AI factories by 2030. Forward P/E sits around 24x and the PEG ratio is 0.70, implying analysts price moderate growth into the stock. Competitive risks include Microsoft's Maia 200, AMD gains, and custom silicon from Meta, Amazon, and Google. Beat magnitude has narrowed and growth rates have decelerated from fiscal 2025 levels, intensifying valuation risk.
Read at 24/7 Wall St.
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