AI Bubble Worries Are Rising. Nvidia's $31.9 Billion Profit Says Otherwise.

Core Insights - Nvidia's recent earnings report alleviates concerns about an AI bubble, showcasing strong demand for AI infrastructure [1] Financial Performance - Nvidia reported record revenue of $57 billion for fiscal Q3 2026, a 62% increase year-over-year and a 22% increase sequentially [3] - Data center sales contributed significantly, generating $51.2 billion, up 66% from the previous year [3] - The company's gross margin stood at 73.4%, with net income reaching $31.9 billion, a 65% increase from last year and a 21% increase from Q2 [3] - Earnings per share rose 67% year-over-year to $1.30 [3] Market Outlook - Nvidia's CEO highlighted the accelerating demand for compute power in AI, indicating a "virtuous cycle" of growth in the AI ecosystem [4] - The company anticipates revenue of $65 billion for fiscal Q4, with margins expected to improve to between 74.8% and 75% [4] Strategic Partnerships - Nvidia has established contracts with major AI players, including OpenAI and Anthropic, to provide substantial compute power using its architecture [5] - Partnerships with Google Cloud, Microsoft Azure, Oracle, and xAI further solidify Nvidia's position in the AI infrastructure market [5] Stock Market Reaction - Following the earnings report, Nvidia's stock rose 4% in after-hours trading, with other AI-related stocks also experiencing gains [6]