Nvidia Smashes Earnings Forecasts: AI Momentum Lifts Markets

Oil prices lift and Walmart earnings imminent.

Strong Q3 results from Nvidia restore investor confidence and boost tech stocks, with broader market implications

Nvidia Beats Expectations with Surging AI Demand

Nvidia has once again shaken up global stock markets with better-than-expected earnings and a confident outlook, helping to calm fears that the artificial intelligence (AI) boom has overheated.

The world’s most valuable chipmaker reported a 62% increase in Q3 revenue, marking its first acceleration in sales growth in nearly two years. The company is now forecasting fourth-quarter revenue of $65 billion, significantly ahead of analysts’ $61.66 billion estimate.

Nvidia CEO Jensen Huang dismissed concerns of an “AI bubble,” stating:

“From our vantage point, we see something very different.”

He added that demand is robust across a wide range of sectors—not just major cloud platforms—highlighting that Nvidia’s chips are found in everything from data centres to robotics and PCs.

Key Points:

• Q3 sales surged 62% year-on-year
• Q4 guidance: $65 billion in revenue
• Nvidia chips dominate AI and cloud infrastructure markets
• CEO says AI demand remains broad and resilient
• $500 billion in chip orders forecast through 2026

Stock Markets Rally on Nvidia Optimism

Nvidia's stellar performance had a ripple effect on U.S. stock futures, with the Nasdaq 100 up 1.8%, S&P 500 up 1.3%, and Dow Jones up 0.6% in premarket trading.

The boost came after several consecutive days of losses for U.S. indices, which have been under pressure from rising bond yields and economic uncertainty.

Investors are now more optimistic about the broader tech sector, which has been heavily reliant on AI-driven momentum.

U.S. Jobs Data and Fed Rate Cuts in Focus

Later in the week, attention turns to the delayed September nonfarm payrolls report—postponed due to the U.S. government shutdown. Analysts expect job growth of 50,000, more than double August’s 22,000.

However, the Federal Reserve may remain cautious. While weak job numbers could support an interest rate cut in December, high inflation remains a concern.

Walmart Earnings Awaited

Retail giant Walmart is also due to release quarterly results, which may offer insights into consumer sentiment ahead of the key holiday shopping season.

• Expected revenue: $177.5 billion, up 4.7%
• Expected EPS: $0.60, slightly higher than last year
• CEO Doug McMillon to retire in 2026 after tripling the company’s market value

Retail has been mixed this earnings season:

• Target cut full-year guidance
• Home Depot expects lower profits
• Lowe’s beat expectations and raised its forecast

Oil Prices Rebound

Brent crude rose to $63.86 and WTI to $59.59 per barrel, supported by a larger-than-expected draw in U.S. stockpiles and upcoming sanctions deadlines against Russian oil giants Rosneft and Lukoil.

A potential end to the Russia-Ukraine conflict—hinted at in a recent U.S.-drafted peace framework—could further affect crude prices in the weeks ahead.

Outlook: Can Nvidia Keep the AI Rally Going?

Nvidia’s results reaffirm its position as a central player in the AI revolution. However, investors will be watching closely for signs of broader economic strain, especially from job market data and central bank signals.

For now, Nvidia's strong demand pipeline and dominance in AI computing suggest continued resilience, with potential for further share price gains if trends hold.

Sources: (Investing.com, Reuters.com)