NVIDIA Blackwell Ships Smoothly, But Guidance Lacks Surprise

Insights – NVIDIA shares dropped as much as 5% in after-hours trading due to revenue guidance falling short of the highest expectations. However, smooth shipments of Blackwell chips eased investor concerns, narrowing the decline to 2%.

On November 20, after the U.S. market closed, NVIDIA (NVDA) released its Q3 FY2025 earnings report.

The data showed quarterly revenue of $35.08 billion, a 94% year-over-year increase. Non-GAAP earnings per share (EPS) came in at $0.81, up 103% year-over-year. Both figures exceeded market expectations, while gross margin stood at 75%, in line with forecasts.

Source: NVIDIA FY25Q3 CFO Commentary

Breaking it down by segment, core data center revenue reached $30.8 billion, up 112% year-over-year, exceeding analyst expectations.

Source: NVIDIA Official Website; FY25Q3 Business Segment Performance

Looking ahead, NVIDIA forecasts Q4 revenue of $37.5 billion, slightly above the analyst consensus of $37.1 billion but below the highest estimate of $41.0 billion. NVIDIA shares initially fell 5% but pared losses after earnings release.

However, NVIDIA CEO Jensen Huang noted during the earnings call that Blackwell shipments this quarter are expected to exceed prior forecasts.

During the earnings call, NVIDIA CFO Colette Kress and CEO Jensen Huang addressed concerns surrounding the AI-focused Blackwell chips.

Kress stated that Blackwell chips began production and shipment in Q4 FY2025 and are expected to remain in short supply through FY2026. The company has already shipped 13,000 Blackwell chip samples to clients. In Q3, major customers such as Microsoft, Oracle, and OpenAI began receiving shipments.

Huang emphasized the extraordinary demand for Blackwell chips and projected higher-than-expected deliveries this quarter.

When asked about the potential impact of tariffs under the Trump administration, Huang stated that NVIDIA would fully support any decisions made by the new government and comply with all resulting regulations.

Wall Street analysts remain largely optimistic about NVIDIA’s prospects but acknowledge that market expectations for the company are exceptionally high.

Ryan Detrick, Chief Market Strategist at Carson Group, noted that while investors have become accustomed to NVIDIA consistently outperforming expectations, it is becoming increasingly challenging to do so. He added that although the report remains strong, meeting such high expectations is significantly harder.

Year-to-date, NVIDIA shares have surged 203%.

Source: TradingView; NVIDIA (NVDA) Stock Performance in 2024