Earnings Call Insights: NVIDIA Corporation (NVDA) Q3 2026
Management View
- Colette Kress, Executive VP & CFO, reported “revenue of $57 billion, up 62% and a record sequential revenue growth of $10 billion or 22%.” Kress stated that “we currently have visibility to $0.5 trillion in Blackwell and Rubin revenue from the start of this year through the end of calendar year 2026.” She emphasized that “demand for AI infrastructure continues to exceed our expectations. The clouds are sold out and our GPU installed base, both new and previous generations, including Blackwell, Hopper and Ampere is fully utilized.”
- Kress noted, “Record Q3 data center revenue of $51.2 billion increased 66% year-over-year.” She highlighted that NVIDIA’s networking business “generated revenue of $8.2 billion, up 162% year-over-year.”
- Kress detailed new and expanding partnerships: “AWS and HUMAIN expanded their partnership, including the deployment of up to 150,000 AI accelerators, including our GB300,” and “xAI and HUMAIN also announced a partnership in which the 2 will jointly develop a network of world-class GPU data centers anchored by the flagship 500-megawatt facility.”
- She said, “Blackwell gained further momentum in Q3, as GB300 crossed over GB200 and contributed roughly 2/3 of the total Blackwell revenue.”
- On China, Kress explained, “H20 sales were approximately $50 million, sizable purchase orders never materialized in the quarter due to geopolitical issues and the increasingly competitive market in China.”
- On new products, Kress stated, “The Rubin platform is on track to ramp in the second half of 2026. Powered by 7 chips, the Vera Rubin platform will once again deliver an x-factor improvement in performance relative to Blackwell.”
- Jen-Hsun Huang, CEO, commented, “As a reminder, NVIDIA is unlike any other accelerator. We excel at every phase of AI from pre-training and post training to inference.”
- Huang said, “The world is undergoing 3 massive platform shifts at once… NVIDIA is uniquely addressing each of the 3 transformations.”
Outlook
- Kress provided, “Total revenue is expected to be $65 billion, plus or minus 2%. At the midpoint, our outlook implies 14% sequential growth driven by continued momentum in the Blackwell architecture.”
- Kress stated, “GAAP and non-GAAP gross margins are expected to be 74.8% and 75%, respectively, plus or minus 50 basis points.”
- She added, “Looking ahead to fiscal year 2027, and input costs are on the rise, but we are working to hold gross margins in the mid-70s.”
- Kress reiterated, “Consistent with last quarter, we are not assuming any data center compute revenue from China.”
Financial Results
- Kress reported, “GAAP gross margins were 73.4% and non-GAAP gross margins was 73.6%, exceeding our outlook.”
- She noted, “GAAP operating expenses were up 8% sequentially and up 11% on non-GAAP basis.”
- On the balance sheet, “inventory grew 32% quarter-over-quarter, while supply commitments increased 63% sequentially.”
- Gaming revenue was stated as “$4.3 billion, up 30% year-on-year.”
- Professional Visualization revenue reached “$760 million, up 56% year-over-year.”
- Automotive revenue recorded “$592 million, up 32% year-over-year.”
Q&A
- Joseph Moore, Morgan Stanley: “I wonder if you could update us, you talked about the $500 billion of revenue for Blackwell plus Rubin in ’25 and ’26… are those still kind of the general parameters… any possibility of upside to those numbers as we move forward?” Colette Kress: “Yes, that’s correct. We are working into our $500 billion forecast. And we are on track for that… there’s definitely an opportunity for us to have more on top of the $500 billion that we announced.”
- Christopher Muse, Cantor Fitzgerald: “Do you see a realistic path for supply to catch up with demand over the next 12 to 18 months?” Jen-Hsun Huang: “We’ve done a really good job planning our supply chain… all of these exponentials, not to mention just today, I was reading a text from Denis. And he was saying that pre-training and post training are fully intact.”
- Vivek Arya, BofA Securities: “What assumptions are you making on NVIDIA content per gigawatt in that $500 billion number?…” Jen-Hsun Huang: “Hopper generation was probably something along the lines of 20-some-odd, 20 to 25. Blackwell generation, Grace Blackwell particularly is probably 30 to 30 to say, 30 plus or minus and then Rubin is probably higher than that.”
- Benjamin Reitzes, Melius: “What are your plans for that cash? How much goes to buyback versus investing in the ecosystem?…” Jen-Hsun Huang: “We’re going to continue to do stock buybacks. We’re going to continue to do that. But with respect to the investments, this is really, really important work that we do. All of the investments that we’ve done so far, all the period, is associated with expanding the reach of CUDA expanding the ecosystem.”
- James Schneider, Goldman Sachs: “You’ve talked about roughly 40% of your shipments tied to AI inference. I’m wondering, as you look forward into next year, where do you expect that percentage could go…?” Jen-Hsun Huang: “I think that it’s hard to know exactly what the percentage of it will be at any given point in time and who. But of course, our hope is that inference is a very large part of the market because if inference is large, then what it suggests is that people are using it in more applications and they’re using it more frequently.”
- Timothy Arcuri, UBS: “What’s the single biggest bottleneck that worries you that could constrain your growth?” Jen-Hsun Huang: “These are all issues and they’re all constraints… But the most important thing that we have to do is do a good job planning… At this point, I’m very confident that NVIDIA’s architecture is the best performance per TCO, it is the best performance per watt.”
- Stacy Rasgon, Bernstein: “You said for next year, you’re working to hold them in the mid-70s. So I guess, first of all, what are the biggest cost increases?…” Colette Kress: “Next year, there are input prices that are well known in the industries that we need to work through… we do believe as we look at working again on cost improvement, cycle time and mix that we will work to try and hold at our gross margins in the mid-70s.”
- Aaron Rakers, Wells Fargo: “Have you seen, I think you’ve been fairly adamant in the past that some of these programs never really see deployments. But I’m curious if we’re at a point where maybe that’s even changed more in favor of just GPU architecture.” Jen-Hsun Huang: “So first of all, you’re not competing against teams — excuse me, against a company, you’re competing against teams… We’re now the only architecture in the world that runs every AI model…”
Sentiment Analysis
- Analysts pressed for clarity on revenue targets, supply-demand dynamics, market share assumptions, and strategic capital allocation. Their tone was generally neutral to slightly positive, with persistent curiosity about upside drivers and risk factors.
- Management maintained a confident and optimistic tone throughout, repeatedly expressing certainty in NVIDIA’s product leadership and market opportunity. Huang’s use of phrases like “I’m very confident” and “we are on track” signals strong conviction.
- Compared to the previous quarter, both analysts and management sustained a positive outlook, but current management responses revealed increased emphasis on scale, supply chain stability, and new partnerships. There was little sign of defensiveness or hesitation.
Quarter-over-Quarter Comparison
- Guidance for Q4 revenue increased from the previous quarter’s $54 billion to $65 billion, reflecting ongoing demand acceleration.
- Gross margin guidance moved up from 73.3%-73.5% previously to 74.8%-75.0% for the coming quarter.
- Management continues to highlight rapid expansion in the data center and AI infrastructure space, but now places even greater focus on strategic partnerships and ecosystem investments.
- Analysts’ questions in both quarters centered on revenue growth, product cadence, and capital allocation; this quarter, they also probed deeper into supply-demand constraints and the magnitude of ecosystem investments.
- Management’s confidence in their ability to scale and maintain leadership remains high, with more explicit forward targets and visibility to $0.5 trillion in Blackwell and Rubin revenue.
Risks and Concerns
- Kress cited “geopolitical issues and the increasingly competitive market in China” as a key factor impacting H20 sales, with sizable purchase orders not materializing.
- Management noted rising input costs and the need for continued cost improvements to maintain gross margins in the mid-70s.
- Analysts raised concerns about supply catching up with demand, potential bottlenecks (including power, financing, memory, and foundry), and the sustainability of current growth rates.
- Management stressed ongoing engagement with U.S. and China governments and highlighted global supply chain resiliency efforts.
Final Takeaway
NVIDIA management emphasized another record quarter with strong sequential and annual growth, propelled by robust AI infrastructure demand and leadership in accelerated computing. The company maintained visibility to $0.5 trillion in Blackwell and Rubin revenue through the end of 2026, raised guidance for the next quarter, and described deepening partnerships and ecosystem investments. While highlighting new product ramps and ongoing supply chain initiatives, management acknowledged geopolitical and cost headwinds, but expressed continued confidence in their platform’s performance, scale, and long-term opportunity.