Nvidia Q3 Earnings: AI Demand Drives Revenue and Growth

Nvidia (NASDAQ:NVDA) will release its third-quarter earnings after the bell on Wednesday, with strong expectations for growth fueled by surging AI demand.

Analysts predict revenue of $33.28 billion, up 84% year-over-year, and net income soaring to $17.45 billion, or 70 cents per share, from $9.24 billion (37 cents per share) a year ago.

Nvidia’s data center business remains the company’s crown jewel. Second-quarter data center revenue hit $26.3 billion, and projections suggest this will climb further to $29.53 billion in Q3.

CEO Jensen Huang emphasized the transformation AI is driving, stating, “Global data centers are modernizing at full throttle with accelerated computing and generative AI.”

Stock Performance and Analyst Outlook

Nvidia shares have soared nearly 200% year-to-date, closing at $141.98 last Friday.

Morgan Stanley recently raised its price target for the stock to $160, citing the sustained momentum in AI and machine learning hardware demand.

“We see Nvidia’s Data Center division as the primary growth driver for the next five years,” Morgan Stanley analysts noted. However, they highlighted potential near-term risks from supply constraints.

Blackwell AI Chip: A Catalyst Ahead

Investors are eager for updates on Nvidia’s Blackwell AI chip. Touted as an industry game-changer, the chip is expected to deliver several billion dollars in revenue during the January quarter as production scales.

While the AI-driven market has created a tailwind for Nvidia, Morgan Stanley expects larger upward revisions in the company’s outlook later this year.

These factors will shape Nvidia’s trajectory as the AI boom continues.