It's a good time to be the arms dealer for the AI boom
(2025/11/20)
- Reference: 1763596602
- News link: https://www.theregister.co.uk/2025/11/19/nvidia_earnings_q3_2025/
- Source link:
Nvidia kicked the can labeled "AI bubble" down the road on Wednesday.
"There's been a lot of talk about an AI bubble," said CEO Jensen Huang during the AI arms dealer's third-quarter earnings call. "From our vantage point, we see something very different."
Huang marked the occasion by noting, in [1]a statement , that "Blackwell sales are off the charts, and cloud GPUs are sold out."
[2]
Recent [3]high-profile sales of Nvidia stock by Peter Thiel's hedge fund and by Softbank raised concern among investors about the GPU maker and the health of the AI boom. The company reported revenue of $57 billion, an increase of 22 percent from the previous quarter and an astonishing 62 percent from the year-ago quarter.
[4]
[5]
It maintained this growth with a GAAP gross margin of 73.4 percent. That kind of margin is rarely seen outside monopolies such as Microsoft's Windows back before the mobile boom changed the addressable market for operating systems, and Google's search business in more recent years.
Nvidia's continued growth suggests doubters have abandoned the ship prematurely. And it now appears the tech-dependent US economy still has some upside potential.
[6]
One of the concerns related to Nvidia has more to do with its customers than the company itself. Noted investor Michael Burry has [7]argued that companies like Oracle and Meta are understating the depreciation of their Nvidia GPUs, an accounting practice that distorts the market value of these firms.
Treating Nvidia GPUs as if they will remain commercially useful for more than two or three years reduces annual costs, pushes paper profits higher, and generally makes financial statements look better.
[8]Devs gripe about having AI shoved down their throats
[9]Commodity memory prices set to double as fabs pivot to AI market
[10]Microsoft reveals new cloudy AI PC that's not a Copilot+ PC
[11]Alibaba releases chatbot that produces error when asked about Tiananmen Square
Nvidia's product cycle is faster than that: In 2023, the company said in [12]an investor presentation [PDF] that it would shift "from two-year rhythm to one-year rhythm." So it would seem to be difficult to justify long depreciation schedules for the Nvidia kit.
The lion's share of Nvidia's revenue came from the company's data center business, which reached $51.2 billion, an increase of 25 percent from Q2 and 66 percent from a year ago.
Huang argued demand will continue to grow, as generative AI is shifting the work that hyperscalers used to do on CPUs over to GPUs.
[13]
There were some small speckles of doubt in the earnings report, particularly around the circular deals that are arguably helping to prop up the AI boom. While Nvidia in September [14]celebrated its intent to "invest up to $100 billion in OpenAI" as part of a data center partnership, the risk boilerplate in the GPU maker's form [15]10-Q filing [PDF] makes that deal sound less certain.
"In the third quarter of fiscal year 2026, we entered into a letter of intent with an opportunity to invest in OpenAI," the filing says. "In November 2025, we entered into an agreement, subject to certain closing conditions, to invest up to $10 billion in Anthropic. There is no assurance that we will enter into definitive agreements with respect to the OpenAI opportunity or other potential investments, or that any investment will be completed on expected terms, if at all." ®
Get our [16]Tech Resources
[1] https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-third-quarter-fiscal-2026
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.reuters.com/business/media-telecom/peter-thiels-fund-offloaded-nvidia-stake-third-quarter-filing-shows-2025-11-17/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://x.com/michaeljburry/status/1987918650104283372?s=20
[8] https://www.theregister.com/2025/11/19/ai_force_feeding/
[9] https://www.theregister.com/2025/11/19/commodity_memory_price_rise/
[10] https://www.theregister.com/2025/11/19/microsoft_virtual_pc_update/
[11] https://www.theregister.com/2025/11/18/alibaba_qwen_bot/
[12] https://s201.q4cdn.com/141608511/files/doc_presentations/2023/Oct/NVIDIA-Oct-2023-Investor-Presentation.pdf
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[14] https://nvidianews.nvidia.com/news/openai-and-nvidia-announce-strategic-partnership-to-deploy-10gw-of-nvidia-systems
[15] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001045810/13e6981b-95ed-4aac-a602-ebc5865d0590.pdf
[16] https://whitepapers.theregister.com/
"There's been a lot of talk about an AI bubble," said CEO Jensen Huang during the AI arms dealer's third-quarter earnings call. "From our vantage point, we see something very different."
Huang marked the occasion by noting, in [1]a statement , that "Blackwell sales are off the charts, and cloud GPUs are sold out."
[2]
Recent [3]high-profile sales of Nvidia stock by Peter Thiel's hedge fund and by Softbank raised concern among investors about the GPU maker and the health of the AI boom. The company reported revenue of $57 billion, an increase of 22 percent from the previous quarter and an astonishing 62 percent from the year-ago quarter.
[4]
[5]
It maintained this growth with a GAAP gross margin of 73.4 percent. That kind of margin is rarely seen outside monopolies such as Microsoft's Windows back before the mobile boom changed the addressable market for operating systems, and Google's search business in more recent years.
Nvidia's continued growth suggests doubters have abandoned the ship prematurely. And it now appears the tech-dependent US economy still has some upside potential.
[6]
One of the concerns related to Nvidia has more to do with its customers than the company itself. Noted investor Michael Burry has [7]argued that companies like Oracle and Meta are understating the depreciation of their Nvidia GPUs, an accounting practice that distorts the market value of these firms.
Treating Nvidia GPUs as if they will remain commercially useful for more than two or three years reduces annual costs, pushes paper profits higher, and generally makes financial statements look better.
[8]Devs gripe about having AI shoved down their throats
[9]Commodity memory prices set to double as fabs pivot to AI market
[10]Microsoft reveals new cloudy AI PC that's not a Copilot+ PC
[11]Alibaba releases chatbot that produces error when asked about Tiananmen Square
Nvidia's product cycle is faster than that: In 2023, the company said in [12]an investor presentation [PDF] that it would shift "from two-year rhythm to one-year rhythm." So it would seem to be difficult to justify long depreciation schedules for the Nvidia kit.
The lion's share of Nvidia's revenue came from the company's data center business, which reached $51.2 billion, an increase of 25 percent from Q2 and 66 percent from a year ago.
Huang argued demand will continue to grow, as generative AI is shifting the work that hyperscalers used to do on CPUs over to GPUs.
[13]
There were some small speckles of doubt in the earnings report, particularly around the circular deals that are arguably helping to prop up the AI boom. While Nvidia in September [14]celebrated its intent to "invest up to $100 billion in OpenAI" as part of a data center partnership, the risk boilerplate in the GPU maker's form [15]10-Q filing [PDF] makes that deal sound less certain.
"In the third quarter of fiscal year 2026, we entered into a letter of intent with an opportunity to invest in OpenAI," the filing says. "In November 2025, we entered into an agreement, subject to certain closing conditions, to invest up to $10 billion in Anthropic. There is no assurance that we will enter into definitive agreements with respect to the OpenAI opportunity or other potential investments, or that any investment will be completed on expected terms, if at all." ®
Get our [16]Tech Resources
[1] https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-third-quarter-fiscal-2026
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.reuters.com/business/media-telecom/peter-thiels-fund-offloaded-nvidia-stake-third-quarter-filing-shows-2025-11-17/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://x.com/michaeljburry/status/1987918650104283372?s=20
[8] https://www.theregister.com/2025/11/19/ai_force_feeding/
[9] https://www.theregister.com/2025/11/19/commodity_memory_price_rise/
[10] https://www.theregister.com/2025/11/19/microsoft_virtual_pc_update/
[11] https://www.theregister.com/2025/11/18/alibaba_qwen_bot/
[12] https://s201.q4cdn.com/141608511/files/doc_presentations/2023/Oct/NVIDIA-Oct-2023-Investor-Presentation.pdf
[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aR6gaJKtlylGDLC1lGIFJAAAANE&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[14] https://nvidianews.nvidia.com/news/openai-and-nvidia-announce-strategic-partnership-to-deploy-10gw-of-nvidia-systems
[15] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001045810/13e6981b-95ed-4aac-a602-ebc5865d0590.pdf
[16] https://whitepapers.theregister.com/
It's only the boosters
IGotOut
that say there is no bubble. He's hardly likely to say "Yeah come 12 months time we're fucked" is he?
Given Google have called the investments in AI irrational, and multiple financial investment companies are saying it's over valued, who should we believe? Hmmmm
Bubbles are great ways to get rich...
...as long as you get out before they pop.
So if you believe Huang, stop worrying. If you do not, keep you eyes glued on those numbers and get ready to pull your cash out real quick. Let's hope it isn't during downtime - a Cloudflare issue or a Microsoft update that doesn't go well. Because that might be expensive.
In other words, do ya feel lucky, punk?