SANTA CLARA, California: Nvidia delivered a powerful reminder of its dominance in the AI hardware boom on November 19, reporting results and guidance far stronger than expected and offering investors a temporary reprieve from mounting fears that the artificial-intelligence frenzy has inflated a market bubble.

After several quarters of decelerating growth, the chipmaker posted accelerating revenue and projected an even stronger fourth quarter. The performance helped soothe nerves on Wall Street, where Nvidia's results are viewed as a barometer of whether massive global spending on AI data center expansion is justified.

"There's been a lot of talk about an AI bubble. From our vantage point, we see something very different," CEO Jensen Huang told analysts, highlighting voracious demand from cloud providers.

"We're in every cloud… from cloud to on-premise to robotic systems, edge devices, PCs, you name it," he said. "One architecture. Things just work. It's incredible."

Huang reiterated that Nvidia has US$500 billion in advanced chip bookings through 2026.

Shares jumped five percent in extended trading, adding roughly $220 billion to the market's value. Nvidia stock had slipped nearly eight percent in November after a three-year surge of 1,200 percent. S&P 500 futures rose one percent following the earnings release.

Stronger-than-expected Earnings

Nvidia now expects fiscal fourth-quarter revenue of $65 billion, plus or minus two percent, beating the $61.66 billion consensus estimate. The company projected an adjusted gross margin of 75 percent, with CFO Colette Kress saying Nvidia plans to keep margins in the mid-70 percent range through fiscal 2027.

Third-quarter revenue rose 62 percent, the first acceleration in seven quarters. Data-center revenue, the engine of Nvidia's growth, increased to $51.2 billion, above the $48.62 billion analysts anticipated.

The upbeat report lifted shares of rival AMD and boosted tech giants such as Alphabet and Microsoft.

Bubble Fears Persist

But not all concerns disappeared. Some analysts cautioned that accelerating earnings alone may not resolve questions about the sustainability of AI infrastructure spending.

"The concern that AI infrastructure spending growth is not sustainable is not likely to ebb," said Stifel analyst Ruben Roy.

Nvidia also sharply increased the amount it spent renting back its own chips from cloud providers who would otherwise not be able to lease them. Those rental commitments totaled $26 billion in Q3 — more than double the prior quarter.

Four customers accounted for 61 percent of Nvidia's third-quarter revenue, up from 56 percent in Q2. The company has also invested billions into AI firms that are among its biggest customers, including a decision in September to put up to $100 billion into OpenAI and supply it with data-center chips — raising concerns about a circular financing loop in the AI ecosystem.

"While results and outlook were stronger than consensus expectations, we think investors will remain concerned about… circular financing in the AI space," said Kinngai Chan of Summit Insights.

Growth Constraints Remain

With U.S. export restrictions limiting sales to China, Nvidia is turning to the Middle East for expansion. The Commerce Department said Wednesday it approved the export of up to 35,000 Blackwell chips to companies in Saudi Arabia and the UAE — a deal likely worth well over $1 billion.

Still, analysts warn that factors outside Nvidia's control pose risks.

"Whether hyperscalers can actually put this capacity to use fast enough" is becoming a key question, said Jacob Bourne of eMarketer, pointing to physical constraints such as power, land, and grid access.

Asked about Nvidia's biggest bottleneck, Huang did not identify a single factor; instead emphasized the scale and complexity of the AI industry and the need for careful coordination across supply chains, infrastructure, and financing.