Nvidia Stock Gives Back Gains After Earnings. Wall Street Still Has Questions About AI.

Nvidia CEO Jensen Huang has built the company into the favored provider of artificial-intelligence chips. (Photo by I-HWA CHENG/AFP via Getty Images)

Key Points

• Nvidia’s adjusted earnings per share were $1.30, exceeding the Wall Street estimate of $1.26.
• Revenue for the fiscal third quarter reached $57 billion, a 62% increase year-over-year, surpassing expectations of $54.9 billion.
• The new average price target on Wall Street following the results implies a 33% upside to Wednesday’s closing price.

Nvidia stock gave back its gains Thursday after the chip maker’s earnings only briefly silenced concerns of an artificial-intelligence bubble.

Nvidia shares ended down nearly 3%, at $180.98 after setting an intraday high of $196 earlier in the session. Thursday’s price was Nvidia’s lowest close since Oct. 22, according to Dow Jones Market Data. It has a market value of $4.397 trillion.

The broader market also gave back gains after starting the day in rally mode. The S&P 500 fell 1.6%, and the Nasdaq shed 2.2%. Other chip stocks dropped, too. Advanced Micro Devices fell 7.8%, and Broadcom fell 2.1%. The iShares Semiconductor exchange-traded fund swung to a 4.8% loss.

The stakes were high going into Nvidia’s report, which was preceded by a selloff in AI stocks. In the run-up to the release, Japan’s SoftBank Group and billionaire Peter Thiel’s fund both disclosed that they had sold their stakes in the chip maker in recent months, while famed short seller Michael Burry took aim at the AI sector in general, alleging companies were overstating the useful life of their chips.

Created with Highcharts 9.0.1NvidiaStock ticker: NVDASource: FactSetAs of Nov. 20

Created with Highcharts 9.0.1Sept. 2025Nov.165170175180185190195200205$210

Nvidia reported adjusted earnings of $1.30 a share for the third quarter, ahead of Wall Street’s consensus estimate of $1.26, according to FactSet. Revenue was $57 billion, up 62% from the prior year and ahead of expectations for $54.9 billion.

For the current quarter, Nvidia forecast a revenue range with a midpoint of $65 billion, above the consensus of $62.2 billion. Notably that implies an acceleration of growth to 65% and doesn’t assume any revenue coming from China.

Sales of the company’s current-generation Blackwell hardware are “off the charts,” Nvidia CEO Jensen Huang added in a statement. Additionally, Nvidia CFO Colette Kress told analysts that chips sold six years ago are still being fully utilized by customers.

But the positive read on AI spending didn’t answer the fundamental questions of where that money is coming from and whether it will be money well spent.

“Even NVDA’s upbeat report has not been enough to reverse recent market headwinds,” wrote a team at 22V Research in a note Thursday. “Over the past two weeks, internals have been tilted Risk-off with Low Volatility [stocks] taking leadership across all market caps.”

That trend continued Thursday. Risk assets got crushed, while defensive names rose in the wake of a strong earnings report from Walmart.

Nvidia shareholders can at least take solace in a smattering of positive takes from sell-side analysts. The new average price target on Wall Street following the third-quarter results is about $248, according to FactSet. That implies a 33% upside to Wednesday’s closing price.

“Nvidia did a good job hinting at how depreciation schedules at their big customers are accurate as software updates prove to extend lives of older chips,” wrote Melius Research analyst Ben Reitzes in a research note. “Therefore, the read across is great for the sector since it points to very strong spending from hyperscalers and sovereigns outside of China through 2026.”

Reitzes raised his target price on the stock to $320 from $300, keeping a Buy rating.

D.A. Davidson analyst Gil Luria reiterated a Buy rating and $250 target price on the stock, noting Nvidia management expect to be capable of delivering more than the $500 billion in cumulative revenue from Blackwell and next-generation Rubin chips it had previously said it could generate from early 2025 through 2026.

Separately, Nvidia got some more good news as the Commerce Department approved the sale of up to 70,000 advanced artificial-intelligence chips to two companies based in the United Arab Emirates and Saudi Arabia.

The deal would allow U.S. companies to sell up to 35,000 of Nvidia’s GB300 servers or their equivalents to both G42, a state-run AI company based in Abu Dhabi, and Humain, a Saudi government-backed AI venture, The Wall Street Journal reported, citing government officials. While it’s a relatively small allocation, the approval should point the way to bigger sales of chips to the Middle East in future for Nvidia and its peers.

Write to Adam Clark at adam.clark@barrons.com