Nvidia’s golden quarter dares markets to call AI a bubble
Nvidia’s latest earnings blew straight through Wall Street expectations, delivering the kind of numbers that force investors to park away thoughts of an AI bubble.
The notorious chip maker’s latest results, a blockbuster $57bn quarter that tore through Wall Street expectations, injected a jolt of confidence into rattled global markets, pulling the FTSE 100 and Nasdaq back from a jittery AI-bubble-fuelled week.
Shares jumped more than four per cent in after-hours trading, with investors breathing a sigh of relief that the company at the centre of the AI boom can still justify the hype with hard numbers.
Nvidia pops bubble fears
If markets wanted a reality check on whether AI spending is slowing, Jensen Huang delivered the opposite.
The Nvidia founder and chief executive openly confronted the “AI bubble” debate for the first time on an earnings call, and utterly dismissed it.
“There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different,” Huang said, adding that demand was “off the charts” across every major segment.
“Compute demand keeps accelerating and compounding… We’ve entered the virtuous cycle of AI.”
Data-centre revenue surged 66 per cent year-on-year to $51.2bn, topping forecasts and eclipsing the annual revenue of most standalone semiconductor firms.
Meanwhile, the firm’s gross margins hit 73.6 per cent, with the company forecasting a staggering $65bn for the current quarter, far above consensus.
Jakub Dubaniewicz, senior equity analyst at Syz Bank, said the message to markets was unmistakable: “Q3 revenue of $57bn and a Q4 guide of $65bn are comfortably ahead of buy-side expectations”.
“Chief executive Jensen Huang described Blackwell demand as ‘off the charts,’ and the Q4 outlook directly addresses recent concerns that AI capex might be peaking”, Dubaniewicz added.
AI litmus test
The results landed at a moment when global markets were looking to Nvidia as a stress test for the trillion-dollar AI trade.
Even before the update, Nvidia’s shares had slid around 10 per cent in November, dragging sentiment with them and fuelling comparisons to the 1990s dot-com boom.
But the sector heavyweight remains undoubtedly the gravitational centre of the AI economy, powering Amazon, Google, Meta, Microsoft and the model developers building the frontier systems shaping national industrial strategies.
Bill Conner, former adviser to Interpol and GCHQ and now chief executive of Jitterbit, said: “This isn’t only a global AI arms race for processing power or chip dominance. It’s a test of trust, transparency, and interoperability at scale.”
“Without clear accountability frameworks, exporting AI risks creating vulnerabilities, turning a strategic asset into a liability.”
Conner added that AI is now “a trust race” as much as a technological one, and that countries capable of both rapid scaling and principled oversight “will define the next generation of AI leadership.”
Markets welcome a breather
The global reaction was immediate, as the FTSE 100 opened 0.7 per cent higher, Europe followed, and futures pointed to a Wall Street bounce.
For a moment at least, Nvidia delivered the stabilising force that central banks couldn’t.
“Nvidia’s reassuring results have brought a sense of calm to markets following a wobbly few days,” said Russ Mould, investment director at AJ Bell.
Dan Coatsworth, also at AJ Bell, added: “Crisis averted… for now.”
But beneath the jubilation, analysts flagged real signs of tension. Inventory and receivables, the ghosts of the dot-com bubble, are rising faster than sales.
Vendor financing is increasingly embedded in how AI deals are structured. Access to data-centre power remains a bottleneck.
China sales, once a meaningful growth engine, are now “effectively zero”.
“There are some red flags to consider,” Coatsworth said. “Vendor financing remains very prevalent… Meanwhile, China’s sales remain effectively zero.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, argued: “Nvidia bears the weight of the world but, like Atlas, it’s standing firm.”
Concerns remain
Shaun Modi, chief executive of Capitol AI, argued that the economic cycle may be volatile, but the long-term trajectory is not in doubt.
“Nvidia’s positive earnings clearly show there is still great belief and faith in the profitability of AI, an indicator the world wants progress”, he told Morning Wire.
“There is still an undeniable risk of an AI bubble in the medium term, but the massive productivity gains from AI in the long term will be in the trillions of dollars.”
His point cuts to the heart of the debate, where AI is still facing corrections, but the structural transformation it is unleashing is not cyclical; it is industrial.
That’s why world governments are racing for AI infrastructure, why Musk and Huang stood together in Washington this week announcing a Saudi mega-data-centre, and why, even for sceptics among us, markets still cling tightly to Nvidia’s guidance.
“AI is going everywhere, doing everything, all at once”, Huang stated, and for the moment, the numbers still match this rhetoric.