NVDA Earnings Analysis: Valuation, Competition, and Market Sentiment Post $57B Revenue Report

NVIDIA (NVDA) reported Q3 2026 earnings with $57B in revenue (up 62% YoY), $31.8B net income (up59%), and $1.30 EPS (up60%), alongside next quarter guidance of ~$65B revenue with a 75% gross margin [1]. The report sparked a Reddit discussion debating whether to buy NVDA for its business fundamentals or inflated price driven by AI hype [4]. Market response showed volatility: a 7.81% drop on Nov 20 (profit-taking) followed by partial recovery, with a 1.37% gain on Nov28 (closing at $180.26) [2][3]. NVDA’s valuation metrics include a $4.39T market cap, 44.21x P/E ratio, and 36.88x P/B ratio [0]. The data center segment, contributing 88.3% of FY2025 revenue, remains the growth driver [0].

1. Valuation Debate
   : Forward PE ratios vary (24x-26x) due to fiscal year timing confusion (FY2026 vs FY2027) [4]. Current P/E (44.21x) is premium compared to potential industry averages (gap in data).
2. Competition Threat
   : Reddit users highlight rivalry from Alphabet, AMD, Intel, and Chinese firms (e.g., Huawei’s Ascend chips) as a risk to NVDA’s moat [4].
3. AI Infrastructure Growth
   : NVDA has $500B in Blackwell/Rubin revenue visibility through 2026 and estimates a $3-4T annual AI infrastructure market by 2030 [1].
4. China Sales Impact
   : H20 sales ($50M) were below expectations due to geopolitical issues, though long-term impact is unclear [1].

• Risks
  : High valuation (44.21x P/E) if growth slows [0]; competition eroding market share [4]; China sales decline [1]; irrational narrative shifts based on price movements [4].
• Opportunities
  : Strong next quarter guidance ($65B) [1]; AI infrastructure market expansion [1]; analyst consensus bullish (73.4% Buy ratings, $250 target) [0].

NVDA’s Q3 earnings reflect robust growth, but investors face trade-offs between AI-driven fundamentals and premium valuation. Key metrics to monitor include next quarter revenue, competitor market share, China sales recovery, and industry AI infrastructure growth [1][0].