In a significant update for investors and tech enthusiasts alike, Nvidia has just reported its third-quarter results, highlighting a robust financial performance that has prompted a 3% increase in after-hours trading. Stacy Ragon, managing director and senior analyst at Bernstein, expressed optimism regarding the results, emphasizing that the numbers indicate a solid “beat and raise.”
Ragon pointed out that the guidance, which projects revenue at 65, falls within the strong upper range that optimistic buyers had anticipated. Notably, Nvidia’s gross margin appears to be improving, heading back toward the previously controversial figure of 75. Comments made by CEO Jensen Huang further support this positive outlook, with reports of overwhelming demand for the company’s Blackwell sales and cloud GPUs being completely sold out. Huang’s remarks indicated a bullish sentiment regarding the accelerating demand for compute resources, suggesting that Nvidia is entering a “virtuous cycle” fueled by artificial intelligence (AI).
When addressing concerns over AI valuations that have surfaced in the market, Ragon remained hopeful that Nvidia’s performance might resolve some of those worries. Huang’s earlier comments at a Washington DC event, where he noted unprecedented cumulative orders totaling $500 billion for 2025 and 2026, add to the company’s optimistic trajectory. Ragon believes that Nvidia’s visibility regarding future orders is expanding, which could bolster investor confidence and address broader market uncertainties.
Another topic of discussion was the durability and depreciation of Nvidia’s chips, a point raised by investment analyst Josh Brown. Ragon clarified that the economic viability of using older technology is currently favorable for Nvidia’s customers, with significant cash flow advantages over newer models. He indicated that as long as there is strong demand for computing resources, customers will continue using existing technology profitably.
Ragon highlighted that concerns about depreciation primarily hinge on demand sustainability. While he acknowledged the existence of bear cases concerning potential drops in demand, he stressed that if such a decline were to occur, it would pose broader implications for the entire tech market.
Overall, the initial reactions to Nvidia’s third-quarter report have been decidedly positive, reflecting a consensus that the company is well-positioned to continue thriving amid a rapidly evolving tech landscape driven by artificial intelligence.
