Nvidia's Q3 Earnings: The Moment of Truth for AI
All eyes are on the chipmaking titan Nvidia as it prepares to announce its third-quarter results after the US market closes on Wednesday, 19 November 2025. The report is widely seen as a crucial litmus test for the artificial intelligence boom that has driven global equities to record-breaking heights.
Nvidia's influence is staggering; it now constitutes roughly seven per cent of the S&P 500 by market capitalisation. Its shares have experienced an astronomical surge of more than 1,200 per cent over the past five years. However, a recent 10 per cent drop since early November has investors questioning the sustainability of this blistering pace.
Market Jitters and Lofty Expectations
US tech stocks are showing tentative signs of stabilisation following a multi-day sell-off, spurred by concerns over lofty AI valuations and massive capital expenditure. The S&P 500 and Nasdaq saw modest gains in early trading, but the market remains jittery ahead of Nvidia's earnings call.
Analysts project another powerhouse quarter for the firm. Revenue is forecast to hit around $54.9 billion, marking a 56 per cent year-on-year increase. Adjusted earnings per share are expected near $1.25, driven predominantly by soaring data centre sales and relentless demand for its AI chips.
The immense weight of this announcement is clear from options data, which suggests the market is bracing for a swing of roughly seven per cent in either direction following the news.
A Proxy for the Entire AI Sector
Analysts emphasise that Nvidia's performance has transcended the company itself, becoming a proxy for the health of the entire AI sector. Its results influence everything from the S&P 500 to cryptocurrency valuations.
"Nvidia’s results have become a macro event," stated Kenneth Lamont, principal at Morningstar. "It’s the poster child for AI investment, but the volatility shows the sector’s sensitivity to growth assumptions and competition."
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, suggested that an earnings beat and raised guidance are the likely outcome. He advised investors to "focus on the business performance rather than short-term market reactions."
Scepticism and the Global AI Race
Despite the optimism, a note of caution persists. Prominent billionaire investors, including Michael Burry and Peter Thiel, have reduced or entirely exited their positions in Nvidia, reflecting unease over what they perceive as stretched valuations.
Concurrently, strategic partnerships between Big Tech firms like Nvidia, Microsoft, and Anthropic underscore the intense global race to secure dominant AI infrastructure and top talent. With AI spending at unprecedented levels, the core debate rages on: is this the dawn of a new era of sustainable growth, or are we witnessing a speculative bubble?
As the world watches, the focus will be on CEO Jensen Huang's outlook for future AI infrastructure spending and the progress of the company's Blackwell chip rollout. Bob Diamond, head of Atlas Merchant Capital, summarised the situation perfectly: "Nvidia will be the litmus test for whether the AI rally has legs or is due for a sharper correction."
