The chipmaker’s growth has slowed this year, leaving many investors to question whether the company’s upcoming quarterly financial report can restore their confidence. After experiencing significant gains fueled by the rise of artificial intelligence (AI), stocks in this sector are now encountering more tempered growth, prompting questions about the sustainability of AI adoption as the initial excitement wanes.
Nvidia’s stock, a prime example, has long been synonymous with AI due to its high-performance graphics processing units (GPUs). These GPUs were crucial in enabling advanced AI models, positioning Nvidia as the market leader and a standard-bearer for AI technology. However, the combination of increasing competition and concerns over slowing growth has led some to ponder whether Nvidia’s peak may have already passed.
Nvidia is set to release its fiscal 2026 third-quarter earnings report, which is highly anticipated after the market closes on November 19. The financial performance will be closely monitored not only by shareholders but also by Wall Street at large, as investors seek insights into the future landscape of AI.
In its fiscal 2026 Q2 report, which concluded on July 27, Nvidia achieved remarkable revenue of $46.7 billion, reflecting a 56% increase year over year and a 6% rise sequentially. This substantial growth translated into earnings per share (EPS) of $1.08, marking an impressive jump of 82%. Market analysts attribute these results predominantly to the ongoing adoption of AI; revenue within its data center segment soared by 61%.
Management has expressed optimism about maintaining this growth trajectory, projecting revenue for Q3 to reach approximately $54 billion, which would represent a 54% increase from the same period last year. Wall Street’s consensus estimates align closely, predicting revenue of $54.66 billion along with adjusted EPS of $1.24. While these figures indicate a small deceleration from Q2, they would still suggest strong performance, especially when compared to the remarkable triple-digit growth seen in the prior year’s quarter.
Contrary to narratives suggesting that the data center investments supporting AI might be waning, evidence indicates that significant infrastructure spending is set to continue. Del’Oro Group reported a 43% year-over-year increase in data center spending in Q2, with accelerated server spending up by 76%. Notably, major tech companies such as Microsoft, Amazon, Alphabet, and Meta are committed to substantial capital expenditures in 2025 aimed at expanding their server capabilities to support AI functionalities.
Projected spending plans from these corporations include Microsoft at $120 billion, Amazon at $118 billion, Alphabet at $85 billion, and Meta at $68 billion, underscoring their commitment to AI expansion. Nvidia’s CEO Jensen Huang anticipates that total data center spending could reach between $3 trillion and $4 trillion by the decade’s end. With Nvidia commanding about 92% of the data center GPU market, the company stands to benefit immensely from this growing infrastructure demand.
As the November 19 earnings report approaches, investors are left pondering the potential movements of Nvidia’s stock. Predictions for the quarter suggest another record revenue announcement, likely surpassing consensus estimates—a trend Nvidia is known to follow. However, uncertainty looms regarding the stock’s immediate reaction post-report.
Nvidia remains the leading choice for data center GPUs amid the continued expansion of AI infrastructure. Despite recent competition gaining attention through notable contract wins, Nvidia has made strides in securing significant deals as well. Market forecasts around the AI sector continue to climb, with baseline estimates above $1 trillion and some optimistic projections suggesting figures could reach as much as 15 times higher.
The stock currently trades at 28 times next year’s expected earnings, a figure some may consider steep. However, considering anticipations of over 26% annual revenue growth over the next five years, many argue this valuation reflects a fair price for a company at the forefront of the AI revolution.
