NVIDIA (NVDA) Q3 FY2026 Earnings Analysis & Market Sentiment Assessment

On November 19, 2025, NVIDIA reported Q3 FY2026 revenue of $57B (62% YoY growth), exceeding consensus estimates by $1.8B, with non-GAAP EPS of $1.3 (beating expectations by $0.04) [0][1]. The data center segment led growth at $51.2B (66% YoY), while gaming revenue reached $4.3B (30% YoY) [0][2]. CEO Jensen Huang emphasized NVIDIA’s “AI factories” strategy, highlighting a $500B order backlog through 2026 [1][5].

A Reddit discussion (r/stocks) questioned whether buying NVDA now reflects confidence in future cash flows or AI hype-driven pricing, noting early growth was captured by private/early public investors [6]. The post also debated forward P/E ratios (24x vs.26x) due to fiscal year timing confusion and raised concerns about increasing competition [6].

• Short-term Price Movement
  : NVDA shares declined 1.12% on November28 (post-earnings reaction) and -1.66% over5 trading days (2025-11-21 to2025-11-28) [1]. The stock lost ~$250B in market value following reports of Meta Platforms considering Google’s TPUs instead of NVIDIA’s GPUs [5].
• Sector Performance
  : While the Technology sector rose0.53% on the latest available date, NVDA underperformed due to competitive concerns [4].
• Sentiment Shift
  : Retail sentiment for NVDA dropped to 33 (bearish) compared to GOOG’s64 (bullish) after the Meta/TPU news [5]. Analysts remain mixed:73.4% rate NVDA as “Buy” with a consensus target of $250 (+41.6% from current price), but recent price action reflects investor caution [2].

• Financial Metrics
  :
  • Revenue: $57B (Q3 FY2026, +62% YoY) [0][1]
  • EPS: $1.3 (beat by $0.04) [0]
  • Data Center Revenue: $51.2B (+66% YoY) [1][2]
  • Gross Margin:73.4% GAAP [0]
  • P/E Ratio:43.29x (current), forward P/E ~23x (FY2027 estimates) [2][5]
• Price & Volume
  :
  • 1-day change: -2.08% [2]
  • 1-month change: -14.75% [2]
    -5-day average volume:245M shares [1]
• Market Position
  :
  • Market Cap: $4.30T [2]
  • Order Backlog: $500B (2025-2026), with $350B unfulfilled [1][5]

• Directly Impacted
  : NVIDIA (NVDA)
• Related Sectors
  : Technology (Semiconductors), Cloud Computing
• Competitors
  : Alphabet (GOOG, TPUs), AMD, Intel [3][5]
• Downstream
  : Meta Platforms (potential TPU adopter), hyperscalers (AWS, Azure) [5]

1. Meta/Google TPU Deal
   : Confirmation of finalization and exact revenue impact (reports suggest up to10% of NVDA’s annual revenue could be at risk) [5].
2. Backlog Breakdown
   : Proportion of $500B backlog from existing hyperscalers vs. new customers/sovereign entities [1][5].
3. Forward P/E Clarity
   : Reconciliation of24x vs.26x estimates across fiscal years (FY2026 vs.FY2027) [6].

• Bull Case
  : $500B backlog,62% YoY revenue growth, dominant data center position, forward P/E of ~23x (attractive relative to growth) [1][2][5].
• Bear Case
  : Increasing competition from Google’s TPUs (2x cheaper at scale), valuation concerns (current P/E43x), market sentiment volatility based on news flow [3][5].

• Competition Risk
  : Google’s TPUs represent a legitimate alternative, with potential to capture up to10% of NVDA’s annual revenue [5]. Users should monitor customer wins/losses closely.
• Valuation Concerns
  : Current P/E ratio of43.29x is significantly higher than the S&P500 average (~20x), making the stock vulnerable to sentiment shifts [2].
• Sentiment Volatility
  : NVDA’s market cap dropped $250B on unconfirmed Meta/TPU news, highlighting sensitivity to competitive narratives [5].

1. Meta’s TPU Adoption
   : Final deal status and volume commitments.
2. Backlog Conversion
   : Rate of $500B backlog into actual revenue.
3. Competitive Response
   : NVIDIA’s strategy to counter Google’s TPU pricing/software advantages.
4. Forward Guidance
   : Q4 FY2026 revenue execution against $65B guidance [0].