Investor News: Nvidia Beats Q3 Expectations as AI Frenzy Continues – MoneySense

The results announced late Wednesday were indicative of the frenzied spending on AI technology that has fueled both the stock market and much of the economy as a whole since OpenAI released its ChatGPT three years ago.

Nvidia has been by far the biggest beneficiary of the run-up, as its processors have become essential for building the AI ​​factories needed to power the most dramatic technological change since Apple released the iPhone in 2007. But in recent weeks there has been a rising sense of sentiment that the high expectations for AI may have become far too high, paving the way for a shocking downturn that could be as dramatic as the rise that has transformed Nvidia from a company worth watching. down from $400 billion three years ago, to a value of $4.5 trillion at the end of Wednesday’s trading day.

Nvidia’s third fiscal quarter report for the August-October period brought a sigh of relief to those worried about a worst-case scenario and could help reverse the recent stock market downturn.

“The market should take a deep sigh given the skittishness we’ve experienced,” said Sean O’Hara, president of investment firm Pacer ETFs.

The company’s share price rose more than 5% in extended trading on Wednesday after the figures were released. If the shares trade similarly on Thursday, it could result in a one-day gain of about $230 billion in shareholder wealth.

Nvidia earned $31.9 billion, or $1.30 per share, up 65% from the same period last year, while revenue rose 62% to $57 billion. Analysts polled by FactSet Research had forecast earnings of $1.26 per share on revenue of $54.9 billion. Additionally, the Santa Clara, California-based company forecast that sales for the current November to January quarter will be about $65 billion, nearly $3 billion above analyst expectations, indicating that demand for its AI chips remains at a fever pitch.

Incoming orders for Nvidia’s top-end Blackwell chip are “off the charts,” Nvidia CEO Jensen Huang said in a prepared statement that described current market conditions as “a virtuous cycle.” In a conference call, Nvidia Chief Financial Officer Collette Kress said the company will have sold about $500 billion worth of chips designed for AI factories within a 24-month time frame by the end of next year. Kress also predicts that trillions of dollars more will be spent by the end of the 2020s.

In the preamble to a conference call that has turned into a State of the AI ​​Market address, Huang took the moment to push back against skeptics who doubt his thesis that technology is at a tipping point that will transform the world. “There has been a lot of talk about an AI bubble. From our vantage point, we see something very different,” Huang emphasized, celebrating the “depth and breadth” of Nvidia’s growth.

The upbeat results, upbeat commentary and assured response reflect the critical role Nvidia plays in the future direction of the economy — a position Huang has leveraged to forge close ties with President Donald Trump even as the White House wages a trade war that has hampered the company’s ability to sell its chips in China’s fertile market.

Trump is increasingly counting on the technology sector and the development of artificial intelligence to achieve his economic agenda. For all of Trump’s claims that his tariffs are generating new investment, much of that foreign capital is going to data centers for AI computing needs or to the energy facilities needed to run those data centers.

“To say this is the most important stock in the world is an understatement,” Jay Woods, chief market strategist at investment bank Freedom Capital Markets, said of Nvidia.

The boom has been a boon for more than just Nvidia, which a few weeks ago became the first company to eclipse a $5 trillion market cap before recent bubble concerns resulted in a more than 10% decline. As OpenAI and other Big Tech powerhouses buy up Nvidia’s chips to build their AI factories and invest in other services related to the technology, their fortunes have also soared. Apple, Microsoft, Google parent company Alphabet Inc. and Amazon all have market values ​​between $2 trillion and $4 trillion.

The freezer issue is hurting Metro’s fourth-quarter results, and costs are expected to continue into the first quarter

Grocery and drugstore chain Metro Inc. was hit in the fourth quarter by costs related to issues at its frozen food distribution center in Toronto. The financial consequences are expected to continue into the first quarter. The company said operations at the plant resumed last week after it was closed for nearly two months, but the temporary closure cost it $22.5 million in the fourth quarter as it reported slightly lower annual profit.

Metro CEO Eric La Flèche said the company expects the distribution center to return to normal operations by the end of December. “I would like to thank all our teams who continue to implement our contingency plan to stock our stores, minimizing the impact on our customers,” he said in a statement on Wednesday.

Metro was forced to halt operations at its frozen food distribution center in Toronto on September 12 due to a problem with the refrigeration system. Business resumed on November 10. La Flèche said on the call that a mechanical problem, and not one related to automation, was responsible for the cooling system problems. He added that the company is currently working with insurers to confirm the amount it can recover.

“Looking ahead to the first quarter of 2026, we estimate that direct costs associated with the rental of temporary cooling equipment and with the implementation of our contingency plan will impact our net profit by approximately $15 million to $20 million,” Chief Financial Officer Nicolas Amyot said on the company’s conference call on Wednesday.