Analysts expect demand for AI chips to remain strong.
Published November 19, 2025
Nvidia expects fourth-quarter revenue to beat Wall Street expectations, betting on a surge in demand for its AI chips from cloud providers even as widespread concerns about an artificial intelligence bubble grow.
The world’s most valuable company expects fourth-quarter sales of $65 billion, up 2% from analysts’ average estimate of $61.66 billion, according to data compiled by LSEG.
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The AI chip leader’s results mark a defining moment for Wall Street, as global markets look to chip designers to determine whether billions of dollars invested in expanding AI infrastructure have resulted in soaring valuations that outpace fundamentals.
“The AI ecosystem is rapidly expanding with more new foundation model makers, more AI startups in more industries, and more countries. AI goes everywhere and does everything at once,” it said in a statement.
Nvidia stock, which had soared 1,200 percent over the past three years before the earnings release, had fallen nearly 8 percent in November on doubts.
Revenue from Nvidia’s data center division, which accounts for the bulk of its revenue, rose to $51.2 billion in the quarter ended Oct. 26. Analysts had expected revenue of $48.62 billion, according to LSEG data.
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But some analysts said factors outside of Nvidia’s control could hinder the company’s growth.
“Demand for GPUs (graphics processing units) remains huge, but investors are increasingly focused on whether hyperscalers can actually leverage this power fast enough,” said eMarketer analyst Jacob Bourne. “The question is whether physical bottlenecks in access to power, land and the grid limit how quickly this demand translates into revenue growth in 2026 and beyond.”
Nvidia’s business also became more concentrated in the fiscal third quarter, with four customers accounting for 61% of sales. At the same time, the company significantly increased the amount it spends renting its chips from cloud customers who otherwise wouldn’t be able to rent them, with total contracts reaching $26 billion, more than double the $12.6 billion in the previous quarter.
Still, analysts and investors widely expected the underlying demand for AI chips, which has driven Nvidia’s performance since ChatGPT’s launch in late 2022, to remain strong.
Nvidia CEO Jensen Huang said last month that the company has $500 billion in reservations for its advanced chips through 2026.
Big Tech, one of Nvidia’s biggest customers, is doubling down on spending to expand its AI data centers and acquire cutting-edge, expensive chips as it works to build out billions of dollars and gigawatts.
Microsoft last month reported record capital spending of nearly $35 billion in its fiscal first quarter, about half of which was spent primarily on chips.
Nvidia expects fourth-quarter adjusted gross margin to be 75% plus or minus 50 basis points. This compares to market expectations of 74.5%.
