Nvidia’s third-quarter earnings report exceeded expectations, but its conservative revenue forecast left investors divided. Despite this, analysts maintain a positive outlook on the chipmaker, citing strong AI-driven demand and upcoming product launches.

Nvidia Beats Q3 Estimates but Offers Cautious Q4 Outlook

Nvidia posted adjusted earnings per share of $0.81, surpassing the consensus estimate of $0.75. The company projected fourth-quarter revenue at $37.5 billion, within a 2% margin of error, slightly above analysts’ forecast of $37.09 billion.

However, the growth trajectory signals a notable slowdown in quarterly revenue expansion, especially when compared to the robust year-on-year increases Nvidia has posted in recent quarters.

This tempered guidance led to an initial 5% drop in after-hours trading, though much of the losses were subsequently recovered.

AI Demand and Blackwell Chips Fuel Optimism

Despite near-term concerns, Nvidia's upcoming Blackwell series of advanced AI chips has sparked enthusiasm among analysts. The company emphasized that demand for its AI products remains robust, potentially outstripping supply in the near term. Analysts see this as a significant growth catalyst.

What Analysts Are Saying About Nvidia’s Prospects

Morgan Stanley: Overweight Rating, Focus on Blackwell Transition

Morgan Stanley reaffirmed its Overweight rating, describing this quarter as a “transitional period” ahead of Blackwell’s launch. The brokerage noted that the only limiting factor for Nvidia’s growth is the demand for AI chips outpacing supply. Morgan Stanley also increased its 2026 revenue estimates, highlighting the long-term growth potential of the Blackwell series.

BofA: Buy Rating, Long-Term Positivity Amid Near-Term Volatility

Bank of America reiterated its Buy rating on Nvidia, despite the company’s guidance falling short of its “bull case” scenario. Analysts pointed to strong demand for AI solutions, particularly Blackwell chips, as a key strength. While BofA acknowledged potential risks like rising expenses and supply chain disruptions, it advised investors to focus on the stock’s long-term fundamentals over short-term market churn.

“Expect the stock to churn near-term as investors digest the lack of ‘sizzle,’ but we continue to like the stock for its substance,” BofA analysts stated.

Baird: Outperform Rating, Price Target Raised

Baird raised its price target on Nvidia to $195 from $150, maintaining its Outperform rating. The firm emphasized that Nvidia is uniquely positioned to benefit from the growing enterprise demand for AI infrastructure. Baird reported no signs of a demand slowdown, underscoring the company’s competitive advantage in AI-driven markets.

Conclusion: Nvidia Positioned for Long-Term Growth

While Nvidia’s Q4 guidance may have tempered some investor expectations, analysts remain confident in its long-term prospects. The combination of strong AI demand, a successful transition to the Blackwell chip series, and a solid market position in AI infrastructure underpins their optimism. For investors, the short-term volatility may be an opportunity to focus on the company’s substantial growth potential.

(Sources: investing.com, reuters.com)