Strong Nvidia results ease fears of AI bubble

Almost 90% of revenue comes from datacentre segment

Despite rumblings from the market suggesting investors have started to run out of patience waiting for AI returns, Nvidia posted strong results this week.

The world’s first $5 trillion company topped analyst expectations in its Q3 2026 earnings report and forecast stronger than expected guidance for the next quarter.

Revenue hit $57 billion, up 62% year-on-year and 22% quarter-on-quarter. Nvidia expects that to grow to $65 billion in Q4’26, above analyst predictions of $61.66 billion.

Net income (profit) was $31.9 billion, up 65% YoY and 21% QoQ.

The datacentre segment was the unsurprising star of the report, responsible for $51.2 billion revenue – or almost 90% of Nvidia’s total. That’s up 66% YoY and 25% QoQ.

The company signed a host of new datacentre deals in its financial Q3, including with Intel, OpenAI, Google Cloud, Microsoft, Meta, Oracle and xAI.

These agreements exemplify the market’s current reliance on circular deals, where all the big tech companies invest in each other, artificially inflating their own value and driving the AI hype train.

Of the total datacentre revenue, $43 billion (75% of total revenue) came from “compute,” or GPU sales. Much of that was from sales of the new GB300 chips.

CEO Jensen Huang was also keen to talk up Nvidia’s newest Blackwell chips, describing sales as “off the charts,” with cloud GPUs “sold out.”

"Compute demand keeps accelerating and compounding across training and inference — each growing exponentially,” he added.

“We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast... AI is going everywhere, doing everything, all at once."

Nvidia’s more traditional business of gaming chips generated $4.3 billion, up 30% YoY but down 1% QoQ. Its other segments, professional visualisation and automotive & robotics, didn’t break the $1 billion barrier; they were responsible for $760 million (up 56% YoY and 26% QoQ) and $592 million (up 32% YoY and 1% QoQ), respectively.

Nvidia has previously said robotics is one of its most important growth areas, but there is clearly still a long way to go before it competes with any of its other segments.

Computing says:

For all the warnings about bursting bubbles, no-one is questioning the importance of AI technology itself – only the speed at which it is producing value, and the frankly bonkers level of investment sloshing around the Nasdaq.

Some analysts dropping comments into my inbox this morning would have us believe this puts all fears of a bubble to rest, but it really only delays them. Nvidia’s Q4 results will tell us more of the story.