NVIDIA Stock Soars 6% as Q3 Earnings and Revenues Crush Estimates

Core Insights - NVIDIA Corporation (NVDA) shares increased nearly 6% after reporting better-than-expected third-quarter fiscal 2026 results, with non-GAAP earnings of $1.30 per share surpassing estimates by 4.84% and showing a 60% year-over-year increase [1][2] Financial Performance - Third-quarter revenues climbed 62% year over year and 22% sequentially to $57.01 billion, exceeding the consensus mark by 4.14% [2] - Non-GAAP gross margin was 73.6%, reflecting a decline of 140 basis points year over year but an improvement of 90 basis points sequentially [11] - Non-GAAP operating income rose 62% year over year and 25% sequentially to $37.75 billion, with a non-GAAP operating margin of 66.2% [13] Segment Performance - The Graphics segment accounted for 10.7% of revenues, rising 51% year over year to $6.1 billion, surpassing the consensus estimate of $5.65 billion [4] - Compute & Networking represented 89.3% of revenues, with revenues soaring 64% year over year to $50.91 billion, exceeding the consensus mark of $48.59 billion [5] - Data Center revenues, which make up 89.8% of total revenues, increased 66% year over year to $51.22 billion, driven by higher shipments of Blackwell GPU computing platforms [6] Market Insights - Gaming revenues increased 30% year over year to $4.27 billion, although they declined 1% sequentially due to normalized inventory levels [7][8] - Professional Visualization revenues rose 56% year over year to $760 million, driven by new product launches [8] - Automotive sales totaled $592 million, up 32% year over year, reflecting continued adoption of self-driving platforms [9] Cash Flow and Shareholder Returns - NVIDIA generated $23.75 billion in operating cash flow during the third quarter and $22.09 billion in free cash flow [15] - The company returned $243 million to shareholders through dividends and repurchased $12.46 billion in stocks during the quarter [16] Future Guidance - For the fourth quarter of fiscal 2026, NVIDIA anticipates revenues of $65 billion, higher than the Zacks Consensus Estimate of $60.3 billion, with a projected non-GAAP gross margin of 75% [17]