Nvidia (NVDA +1.08%) just delivered another blockbuster quarter, and the stock rose about 5% in after-hours trading after its latest results eased some market jitters about a potential AI (artificial intelligence) bubble. On the earnings call, CEO Jensen Huang tackled those worries directly, arguing that big spending in the space is far from a speculative spike, and that demand is rooted in real infrastructure change.
The CEO's comments carry weight with investors. After all, the chip designer sits at the center of today's artificial intelligence boom, supplying accelerated-computing platforms for data centers and AI applications.
Image source: Getty Images.
Bubble fears and demand
"There's been a lot of talk about an AI bubble," Huang said in the company's fiscal third-quarter earnings call. "From our vantage point, we see something very different,"
Huang framed this demand as part of a broader transformation in how computing works.
"The world is undergoing three massive platform shifts at once," Huang explained, calling it the first time since the dawn of Moore's Law that so many changes are unfolding together.
One shift is from general-purpose CPU computing toward GPU-accelerated computing. As Moore's Law slows, customers want more performance per dollar, so moving workloads to Nvidia's accelerated platforms can sharply increase efficiency in areas such as simulations or large-scale data processing.
Another shift centers on generative AI. Companies are replacing classical machine-learning systems with generative models inside search and recommendation engines, which can deepen engagement for users and automate more work inside enterprises. Once those models are deployed, serving results to users requires ongoing GPU-powered inference, which helps explain why cloud providers have kept prioritizing AI spending even as other projects wait.
A third shift involves what Huang described as agentic and physical AI, where models not only generate content but also plan tasks and interact with the physical world through autonomous systems. That evolution could open up new categories of demand as industries like automotive and healthcare invest in specialized AI infrastructure on top of the cloud buildout already underway.
Taken together, the three shifts help explain why Nvidia's order book is so large and why management is comfortable pushing back on bubble talk.
NASDAQ: NVDA
Key Data Points
The proof is in the numbers
Of course, you don't have to just take Huang at his word. Just look at the numbers. People are buying up Nvidia's chips as fast as they can. The company's third-quarter revenue came in at $57.0 billion, up 62% year over year. Data center revenue reached $51.2 billion, up 66% year over year. That performance represented a significant acceleration from the second quarter's 56% year-over-year revenue increase.
And this isn't just a revenue story. Nvidia is generating massive profits. Third-quarter net income was $32 billion, up 65% year over year.
Management also guided to another substantial sequential revenue increase in the fourth quarter as new Blackwell-based systems ramp.
Additionally, the company sees strong growth persisting. "We currently have visibility to a half a trillion dollars in Blackwell and Rubin revenue from the start of this year through the end of calendar year 2026," said Nvidia Chief Financial Officer Colette Kress in the company's third-quarter earnings call.
If Huang is right and there are three major platform shifts occurring simultaneously, we may truly be in the early innings of this AI boom -- something that would have implications not just for Nvidia but for other AI beneficiaries in the space, like hyperscalers.
Of course, it's not like investors aren't pricing in extraordinary growth from AI. Nvidia itself trades at a price-to-earnings ratio of 45. But considering how fast the company is growing, this is a fair valuation -- not quite bubble pricing. And it's especially not bubble pricing if this infrastructure transformation is just getting started.
