Shares of Nvidia (NVDA) jumped about 5% premarket on Thursday after an “exceptional” quarter and “stellar” guidance, boosting its market cap by billions of dollars.
“Nvidia Corporation is upgraded to a “cautious Buy” after strong Q3 earnings and stellar Q4 guidance reinforce its growth momentum,” said Seeking Alpha analyst Kenio Fontes.
Seeking Alpha analyst Bashar Issa noted that Nvidia delivered “exceptional revenue growth last quarter, fueled by robust demand from generative AI labs and hyperscalers.” The analysts maintained his Buy rating on the stock, and said that the company trades at a premium valuation, justified by market leadership, but faces risks if graphics processing unit, or GPU, demand slows or saturation occurs.
Nvidia’s Data Center segment drove 66% year-over-year growth, with robust demand from the U.S. and European clients offsetting lost China revenue due to export restrictions, said Seeking Alpha analyst Agar Capital.
“Despite concerns about valuation and an AI bubble, NVDA’s earnings growth outpaces its stock price, resulting in a lower forward P/E and strong justification for a continued rally,” the analyst added. Agar Capital kept its Buy rating on the stock.
For the period ending Oct. 26, the Jensen Huang-led company said it earned $1.30 per share as revenue soared 62% year-over-year to come in at $57.01B. Both top and bottom-line numbers beat estimates. Looking to the fourth-quarter of fiscal 2026, Nvidia expects to generate $65B in revenue, plus or minus 2%. Analysts were forecasting $61.98B in revenue.
The U.S. tech giant’s results and guidance drove semiconductor stocks higher premarket on Thursday.
“Current period guidance was the best news of the day, coming in more than $3 billion ahead of the street’s top line expectations,” said Seeking Alpha analyst Bill Maurer.
Maurer added that the current valuation is much better than industry peers, even while the growth story is much more impressive.
“Nvidia’s revenue growth largely stemmed from its data center business, where Nvidia benefits like no other company from the huge investments by Alphabet (GOOG) (GOOGL), Meta Platforms (META), Amazon.com (AMZN), and many more. It feels like every week, we get a new announcement about a major data center from these or other tech companies, and Nvidia is providing the chips for most of these data centers – Advanced Micro Devices (AMD) is only a minor competitor, at least for now. Nvidia’s data center business contributed around 90% of Nvidia’s overall revenues,” said Seeking Alpha analyst Jonathan Weber.
However, not all analysts had bullish sentiments.
Nvidia’s robust growth is fueled by surging demand for Blackwell GPUs from an expanding (somewhat circular) AI ecosystem, said Seeking Alpha analyst Ahan Vashi from The Quantamental Investor.
“Despite raising revenue forecasts and modeling for aggressive growth, NVDA’s valuation implies a -17% downside and a 5-year CAGR return below TQI’s investment hurdle rate,” said Vashi. The analyst added that “I maintain a Hold rating on NVDA at $197, due to stretched valuation; however, I would consider buying if shares drop to the mid-$100s without business deterioration over the next year.”
Meanwhile, Seeking Alpha analyst Kumquat Research rated Nvidia a Sell. The analyst said investors should take a cautious approach and potentially trim positions as competition in the GPU space heats up, and Nvidia’s “valuation appears lofty.”
“No monopoly with this much reach and that serves customers with pockets as deep as Microsoft, Meta, Apple, and more can last forever, and I think that reckoning is coming for Nvidia even if the AI bubble refuses to burst. As such, I am rating NVDA a Sell,” Kumquat Research added.