Core Insights - Nvidia reported strong Q3 earnings with an EPS of $1.30 and revenue of $57.01 billion, exceeding street expectations of $55.19 billion [1][5] - Data center revenue for Q3 was $51.2 billion, beating the estimate of $49.34 billion, indicating robust demand in this segment [1][5] - For Q4, Nvidia expects revenue of $65 billion (±2%), surpassing the estimate of $62 billion, and gross margins are projected at 75%, above the expected 74.6% [2][5] Financial Performance - Q3 revenue was $57.01 billion, with earnings per share (EPS) of $1.30, beating the street's estimate of $1.25 [1][5] - The guidance for Q4 revenue is set at $65 billion, which is significantly higher than the whisper number of $64 billion [8][14] - Gross margins are expected to reach 75%, compared to the previous expectations of 73.5% for Q3 and 74.5% for Q4 [5][15] Market Reaction - Following the earnings report, Nvidia's stock rose approximately 5% in after-hours trading, reflecting positive investor sentiment [3][4] - The stock had already increased about 40% year-to-date before the earnings announcement, indicating strong market confidence [3][10] Demand and Supply Dynamics - Nvidia's data center segment accounts for roughly 90% of its revenue, highlighting its critical role in the company's overall performance [6] - The company is experiencing supply constraints that are expected to persist through 2026, which may positively impact revenue and margins [6][12] - Jensen Huang, Nvidia's CEO, noted that cloud GPUs are sold out, indicating strong demand in the market [2][15] Competitive Landscape - Despite competition from companies like AMD and Google, Nvidia is perceived as maintaining a strong position in the market due to its established technology and demand [25][28] - Concerns about AI valuations and sustainability of demand remain, but Nvidia's strong performance may help alleviate some investor worries [7][16] Long-term Outlook - Analysts expect Nvidia's free cash flow potential to increase significantly over the next 8 to 12 quarters, supporting a positive valuation outlook [11][12] - The company has a substantial backlog of orders, estimated at $500 billion, which bodes well for future revenue growth [9][17] - The long-term impact of Nvidia's absence from the Chinese market is uncertain, but current growth outside China is sufficient for the company [30][31]