BAF NEWS

Record Q3 Financial Results

Here’s the twist: Nvidia didn’t just beat. It reset the scoreboard.

Revenue hit a record $57.0 billion in Q3 FY2026, up 62% year over year, with EPS at $1.30. Moreover, Data Center revenue surged to $51.2 billion, up 66% from a year ago, and led the beat. According to available reports, this was the engine behind the quarter’s momentum.

What no one is mentioning: the pace is still accelerating. The company also noted strong quarter-over-quarter gains, underscoring demand that has not rolled over. Consequently, the setup heading into Q4 looks unusually strong.

Raised Q4 Guidance and Margins

You might be surprised that the outlook is even hotter. Nvidia guided Q4 FY2026 revenue to about $65.0 billion, plus or minus 2%. Furthermore, management set non-GAAP gross margin expectations around 75%, signaling confidence in pricing and mix.

However, guidance isn’t just about the top line. It often reveals what leaders see in the order book. In this case, the message is clear: demand visibility looks durable into year-end.

Market Reaction and Value Surge

Investors didn’t wait for the morning. Shares rose roughly 4–5% in after-hours trading on the beat-and-raise print. As a result, Nvidia stood to add around $220 billion in market value, according to Reuters.

Still, after-hours moves can fade by the open. Yet the initial reaction showed how forcefully markets reward growth plus visibility. Notably, the move came amid broader volatility.

Management Addresses AI Bubble Fears

Here’s the twist: leadership isn’t blinking at bubble talk. CEO Jensen Huang pushed back, saying, “There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different.” The company also said “Blackwell sales are off the charts, and cloud GPUs are sold out.”

That tone matters because narratives shape capital allocation. However, the substance matters more. If cloud GPUs are sold out and Blackwell orders are surging, then near-term demand remains tight. Consequently, capacity and deployment speed become the swing factors.

Customer Concentration and Chip Rentals

What no one is mentioning: concentration cuts both ways. Four customers accounted for 61% of Nvidia’s Q3 sales, according to Reuters. Additionally, “chip rental” contracts reached $26 billion in Q3, up from $12.6 billion in Q2.

Therefore, the company is tied even closer to a handful of hyperscalers. This can amplify growth, yet it can also concentrate risk if purchasing cycles pause. Even so, rental arrangements suggest customers want flexibility to scale without massive upfront commitments.

Sustainability and Bottleneck Concerns

Here’s the twist: the demand story may still collide with physics. Analysts highlight potential bottlenecks in power, land, and grid access that could cap the speed of AI data center buildouts. Consequently, the question shifts from desire to deploy, to the practical limits of building and powering the infrastructure.

Moreover, capital intensity remains a watch item. Massive clusters require not just chips, but also cooling, interconnects, and, crucially, electricity. Therefore, even strong orders can stagger if utilities and permitting lag.

Still, the quarter softened ‘bubble’ worries, for now. Results, guidance, and the “sold-out” commentary suggest a runway that is more constrained by infrastructure than by interest. Yet, investors should watch the grid and supply chain almost as closely as the earnings line.

The Big Picture

So where does this leave Nvidia? The company is executing into unprecedented AI demand, recording new highs and pointing higher. Meanwhile, the risks are shifting from sales to scale, from market appetite to physical capacity.

Here’s the twist: those are high-class problems, but problems nonetheless. If power, land, or grid access bite, then revenue growth could become lumpy rather than linear. Even so, for now, the scoreboard reads: records set, guidance raised, and a market still leaning in.