NVIDIA's Earnings Are Out. Can The AI King's Reign Continue? Dear Reader, It is never good to play favorites, but I can't help it… I do have a favorite stock. I'm talking about NVIDIA Corporation (NVDA). There are many reasons why I like NVIDIA. Obviously, it is a leader of the AI Boom. The company also has some of the strongest sales and earnings growth in the market. It also helps that we're up over 3,420% since adding it to my Growth Investor Buy List back in May 2019.  But this just scratches the surface. In a future Market 360, I'll devote more time to fully explaining why NVIDIA is such an important stock – and why I have no plans to sell it anytime soon. But for now, we need to talk about NVIDIA's latest earnings report, which was released yesterday. You may recall that NVIDIA spent about $2.0 billion to develop its next-generation Blackwell GB200 graphics processing unit (GPU). And starting in the fourth quarter, Blackwell would dominate its sales for the next couple of years. NVIDIA's CEO Jensen Huang even recently stated that the Blackwell chips were expected to bring in "several billion dollars" in sales in the fourth quarter alone. Now, there were some concerns earlier this year that the Blackwell chips would be delayed. But as we covered in a previous Market 360 issue (which you can read here), Huang put those concerns to rest, saying, "Blackwell is in full production, Blackwell is as planned, and the demand for Blackwell is insane." So, in today's Market 360, let's take a look at how the numbers came in and if it's still a good buy after earnings. And then, I'll explain why I think the AI Boom is about to explode to a new level very soon. Reviewing NVIDIA's Latest Earnings NVIDIA announced spectacular results for its third quarter in fiscal year 2025 on Wednesday evening. Third-quarter revenue jumped 94% year-over-year to a record $35.1 billion, which topped estimates for $33.2 billion. Data center revenue also set a new record, surging 112% year-over-year to $30.8 billion. I should mention that this is now the sixth quarter in a row that both revenue and data center revenue have hit new records.  Third-quarter earnings surged 103% year-over-year to $0.81 per share, compared to $0.40 per share in the third quarter of 2024. The consensus estimate called for earnings of $0.75 per share, so NVIDIA posted a 4% earnings surprise. Gaming revenue grew 15% year-over-year to $3.3 billion and just slightly beat expectations of $3 billion. Additionally, automotive revenue came in at $449 million for the quarter, up 72% from the third quarter of 2024. Huang commented, "The age of AI is in full steam, propelling a global shift to NVIDIA computing." He also noted that the company's Blackwell chips are now in full production and will start shipping this quarter with "very strong" demand. With the Blackwell chips anticipated to add immensely to the company's top and bottom lines going forward, NVIDIA provided a strong outlook. It expects fourth-quarter revenue to be around $37.5 billion, up about 70% from $22.1 billion in the same quarter last year. Now, as we go to press, NVIDIA shares have meandered a bit today in the aftermath of the company's outlook. It appears that some folks were expecting an even bigger acceleration in NVIDIA's sales, with the Blackwell chips now in full production and shipping in the fourth quarter. However, the reality is that the consensus estimate calls for fourth-quarter revenue of $37.1 billion, so NVIDIA's forecast is in line with estimates. And, in my opinion, there's a good chance that NVIDIA is being conservative. Bottom line: NVIDIA remains a great buy after this stunning quarterly report. My Stock Grader tool (subscription required) certainly thinks so. It gives NVIDIA a Fundamental grade of B as well as a Quantitative grade of B, as well as an overall "B" grade, making it a "Buy." On the Cusp of Another AI Boom Now, many folks are still pouring their money into "first-generation" AI stocks. And, in the case of NVIDIA, there is certainly nothing wrong with that. If there is any takeaway from this latest earnings report, it's that NVIDIA should continue delivering stunning results for quite some time. And as such, it is set to continue making money for investors in the coming years. However, in 2025, I predict that the AI Boom will start to broaden out. And the real money will be made in this second wave of the AI Boom. This is where you're going to start seeing a lot of companies adopt AI in their traditional businesses. But, right now, there are a few roadblocks in the way. As I explained in a special presentation, we need to build out a lot of infrastructure to enable these large-scale computing projects – and we need to do it fast. And thanks to Donald Trump's win in the presidential election, we're about to do just that... You see, Trump and his advisors want to make sure the U.S. gains supremacy in the AI race. And they'll do whatever it takes to make sure that happens. So, when Trump returns to the Oval Office, I expect him to issue an executive order that will unleash the floodgates and propel a select group of AI stocks to new heights. Go here to learn more now. Sincerely, | .png)
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