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While the earnings season is coming to an end, the world’s largest company in terms of market cap, Nvidia (NVDA), has yet to report its results for fiscal Q3 of 2025 (which ended in October). Nvidia is scheduled to announce its Q3 earnings this Wednesday, Nov. 20, after the market closes, and the highly anticipated event will be a key driver of investor sentiment toward stocks and the tech sector more broadly this week.
Around 93% of companies have reported quarterly results so far this season - 75% of which have surpassed estimates, while 61% have surprised with respect to the top line.
Nvidia has a history of topping consensus expectations, but investors have now come to expect stronger-than-forecast earnings from the chip giant, and NVDA sold off following its Q2 beat. Let's see if the AI heavyweight can manage to surprise Wall Street to the upside with its fiscal Q3 results.
What to Expect From Nvidia In Q3
In fiscal Q3 of 2025, Nvidia is forecast to report:
- Revenue of $33.28 billion, up from $18.1 billion last year
- Adjusted earnings of $0.70 per share, compared to $0.37 per share in the year-ago period
- Adjusted net income of $17.45 billion, up from $9.24 billion in Q3 of 2024
Despite its massive size, Nvidia is on track to grow revenue and earnings by roughly 80% year over year. The key needle mover for the company’s sales is its high-flying data center segment, which has evolved over the last two years to become Nvidia’s primary business. Nvidia’s data center business develops and sells graphics processing units, or GPUs, designed to power and run artificial intelligence (AI) workloads. These GPUs have allowed Nvidia to lead the AI market, where it commands a share that's estimated to exceed 80%, according to multiple reports. The company's data center segment also includes computing and networking solutions.
In the last 12 months, Nvidia’s data center sales have totaled $8.175 billion, up from $15 billion in fiscal 2023. The business now accounts for 85% of sales, up from 60% in 2023, due to demand from hyperscale cloud providers such as Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL).
In fiscal Q3 of 2025, Nvidia’s data center segment is forecast to double sales year over year to $29 billion. During the last earnings call, Nvidia CEO Jensen Huang said, “Global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”
In fact, due to the AI megatrend, Nvidia’s data center business will drive the majority of the company’s growth through 2030. However, supply chain constraints might limit Nvidia’s outlook in the near term, as reports over the weekend pointed to overheating issues with early deployments of Blackwell GPUs.
Is Nvidia Stock Overvalued?
Valued at a market cap of $3.5 trillion, Nvidia stock has returned over 810% to shareholders in the last two years. The tech giant has created massive wealth for long-term shareholders, surging almost 27,000% since November 2014.
Trading at a trailing price-to-earnings multiple of 66.6x, Nvidia stock might seem expensive. However, according to investment bank Piper Sandler, AI accelerator sales (such as GPUs) will touch $70 billion in 2025, most of which will be captured by Nvidia. Further, AI accelerator sales are forecast to grow at a compound annual growth rate of 29%, while spending on AI-related products and services might increase by 37% through 2030. According to Huang, most data centers will deploy GPUs going forward, allowing Nvidia to benefit from multiple secular trends.
Analysts tracking NVDA stock expect adjusted earnings to expand to $4.25 per share in fiscal 2026. So, if the tech giant is priced at 50x trailing price to earnings, it will trade at $212.50 in early 2027, indicating an upside potential of almost 50% from current levels.
Out of the 43 analysts covering NVDA stock, 86% recommend a “strong buy.” The average target price for NVDA stock is $159.55, more than 13.5% above the current trading price.
