Why Did Nvidia Stock Soar Today?
Key Points
Nvidia blew past expectations yet again.
Company guidance calls for an even better fiscal fourth quarter.
Nvidia's cloud GPUs are completely sold out.
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It didn't take long for Nvidia (NASDAQ: NVDA) to dispel fears of a slowdown in artificial intelligence (AI) infrastructure spending. Its latest earnings report was stellar, and investors are reacting today by jumping into the AI leader's stock.
Nvidia shares had retreated more than 10% from their recent record high price, but they seem to be back on track toward that level today. Shares jumped more than 5% this morning and remained higher by 4% as of 10:22 a.m. ET.
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Image source: Nvidia.
Jensen Huang sees the AI ecosystem exploding
Nvidia's overall fiscal third-quarter revenue rocketed 62% higher than the prior-year period and was even sequentially higher by 22% compared to the second quarter. Yet the company told investors to expect an even better fourth quarter. Revenue should grow by about 65% in the current quarter at the midpoint of the company's guidance.
Data center sales, of course, are leading the way. Revenue from that segment alone would have made for a record quarter. Summarizing that segment's results, CEO Jensen Huang stated, "Blackwell sales are off the charts, and cloud GPUs [graphics processing units] are sold out."
Yet that wasn't the only impressive part of the business. Gaming sales, Nvidia's second-largest segment, soared by 30% year over year. And professional visualization, which now includes sales of Nvidia's Spark, which the company calls the world's smallest AI supercomputer, rocketed 26.5% sequentially over Q2.
If that weren't enough for investors, Huang gave tech investors one more reason to be bullish with this declaration:
We've entered the virtuous cycle of AI. The AI ecosystem is scaling fast -- with more new foundation model makers, more AI start-ups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.
No wonder Nvidia has the entire market moving higher today, along with its own shares.
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Howard Smith has positions in Nvidia and has the following options: short February 2026 $170 calls on Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
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