NVIDIA (NVDA) Mixed Sentiment & Market Impact Analysis Post Q3 FY26 Earnings

2025-11-23 (EST)
2025-11-26

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On 2025-11-23 (EST), a Reddit discussion highlighted mixed sentiment on NVIDIA (NVDA) stock, alongside the company’s Q3 FY26 earnings report. Key points from the discussion include:

• Bearish concerns
  : Short-term macro factors (inflation/jobs data affecting GPU demand), customer concentration risk (alleged $33B revenue from 4 customers), and overvaluation/accounting practices.
• Bullish views
  : Long-term AI growth prospects and strong profitability outlook.
• Neutral perspective
  : Recent stock drop is part of a broader market correction, not NVDA-specific.

NVDA reported record Q3 FY26 earnings ($57.0B revenue, +62% YoY; $31.9B net income) with Q4 guidance of $65B ±2% revenue, but the stock dropped to $178 post-report [0].

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NVDA’s stock declined 9.47% over the 14 trading days ending 2025-11-25, from $196.42 to $177.82 [0]. This underperformed the Technology sector, which was up 0.78% as of 2025-11-26 [0], suggesting NVDA-specific concerns (e.g., customer concentration) contributed to the drop beyond market trends.

• Analysts
  : Maintain a BUY consensus with a $250 average price target (+40.6% from current levels) [0].
• Retail Investors
  : Mixed—Reddit users express bearish views on valuation and concentration, while some emphasize long-term AI growth.

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• Profitability
  : Net profit margin of 53.01% [0] indicates strong operational efficiency, aligning with bullish long-term prospects.
• Valuation
  : P/E ratio of 43.61x [0] is elevated compared to historical averages, supporting overvaluation concerns.
• Revenue Concentration
  : Data center segment accounts for 88.3% of FY2025 revenue [0], amplifying risks if major customers reduce orders.

• Volatility
  : Daily standard deviation of 2.74% over 14 days [0] reflects increased market uncertainty.
• Volume
  : Average daily volume of 235.97M [0] (higher than usual) suggests heightened selling pressure.

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1. Customer Concentration
   : Verify the Reddit claim of $33B revenue from 4 customers by reviewing NVDA’s latest 10-K filing for detailed customer data.
2. Accounting Practices
   : Assess if NVDA uses aggressive revenue recognition (e.g., deferred revenue for long-term contracts) to address Reddit’s “product giveaways for future payment” concern.
3. Macro Correlation
   : Analyze how recent inflation/jobs data and Fed policy decisions impact enterprise GPU spending.

• NVDA’s Blackwell architecture (in full production) is expected to drive future growth, but gross margins may dip to low-70s during the ramp [0].
• The company’s AI software ecosystem (e.g., NIM, Omniverse) is a competitive moat, but execution risks remain for new product launches.

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“Users should be aware that NVDA’s high revenue concentration in the data center segment (88.3% of FY2025 revenue [0]) may significantly impact its financial performance if any major customer reduces orders.”

“This development raises concerns about NVDA’s elevated P/E ratio (43.61x [0]) that warrant careful consideration—high valuations make the stock vulnerable to corrections if growth expectations are not met.”

“Historical patterns suggest that high inflation and interest rates typically reduce enterprise tech spending, which users should factor into their analysis of NVDA’s short-term demand outlook.”

• Blackwell ramp progress and gross margin trends.
• Customer diversification efforts in the data center segment.
• Fed policy decisions and their impact on tech sector valuations.

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