Nvidia stock surges and crashes as bulls, bears fight over meaning of Q3 results

• Nvidia stock has traded violently on Thursday.
• The semiconductor designer known for its AI GPUs beat Q3 consensus.
• Q4 revenue guidance may have been too ho-hum for some.
• Adjusted gross margin expected to condense in Q4.
   

Nvidia (NVDA) stock surged to an all-time high of $152.89, up 4.8% in the first two minutes of trading on Thursday following the leading semiconductor designer’s third-quarter results that were released in Wednesday’s post-market.

Then just as quickly, Nvidia shares sank more than 1% to below $144 as the minutes ticked by. It would seem that there is widespread disagreement over the meaning of the recent quarter’s results.

Nvidia has continued by all accounts to dominate the artificial intelligence (AI) industry with its Hopper and Blackwell GPUs used to train large language models and deal with the new generative AI landscape.

The Dow Jones has gained 0.35% in the meantime as US Initial Jobless Claims for the previous week arrived below consensus, showing that the US economy might be in better shape than originally thought.

Nvidia earnings review

Nvidia managed to beat both the top and bottom line consensus expectations for Q3. Adjusted earnings of $0.81 per share easily beat Wall Street predictions for $0.74. Revenue of $35.08 billion also topped consensus of $33.25 billion.

“AI is transforming every industry, company and country," said CEO and founder Jensen Huang in a statement. "Enterprises are adopting agentic AI to revolutionize workflows. Industrial robotics investments are surging with breakthroughs in physical AI. And countries have awakened to the importance of developing their national AI and infrastructure."

The friction really comes from management’s projection of $37.5 billion in revenue for the fourth quarter. The average consensus for Q4 was already $37.1 billion, so the guidance strikes many as good. 

However, the market has come to expect outsized guidance from the king of chips, and some analysts are projecting revenue of $41 billion. This makes the $37.5 billion figure relatively less impressive.

Data revenue continues to crowd out all other facets of the company. The segment delivered $30.8 billion in sales during Q3, which was up 112% YoY and 17% higher than one quarter earlier. 

Gaming revenue gained 15% YoY to $3.3 billion, while Professional Visualization accounted for $486 million in sales, up 17%.

Nvidia posted a mouth-watering 75% adjusted gross margin for Q3 but guided for 73.5% in Q4.

Nvidia stock forecast

Nvidia stock has reached nearly to $153 on Thursday but now trades in the $143 before lunchtime. The hourly chart below shows support at $140.76, which was the June 20 range high. Additionally, further support sits nearby at $138.

A break of $138 would likely influence traders to dump NVDA shares, and then the $132.50 support level from late October would come into view. But any break above $150 would mean the bearishness is over. 

NVDA 1-hour stock chart