NVIDIA Corp (NASDAQ: NVDA) reported Q3 FY2025 revenue of US$35.1 billion, up 94% YoY and 17% QoQ, meeting expectations.
Data centre revenue reached US$30.8 billion (+112% YoY, +17% QoQ), driven by strong demand for Hopper GPUs (H100, H200) and Spectrum-X networking solutions. Gaming revenue of US$3.3 billion (+15% YoY) beat expectations, while Automotive revenue of US$449 million (+72% YoY) significantly exceeded forecasts of US$364 million.
Non-GAAP EPS came in at US$0.81, up 103% YoY and 19% QoQ, ahead of consensus. Gross margins were 75.0%, declining 70bps sequentially due to Blackwell ramp costs and product mix
NVIDIA stock price
NVIDIA Q3: the Good
- Data Centre Strength: Hyperscaler and sovereign AI demand remained robust, with Hopper GPUs driving growth and H200 ramping faster than prior product generations.
- Gaming and Automotive: Gaming revenue exceeded expectations, supported by demand for AI PCs and GPUs. Automotive growth was driven by EV and robotics adoption, significantly outperforming forecasts.
- Sovereign AI Opportunity: Strong momentum in regional AI infrastructure projects across Europe and Asia-Pacific, highlighting a long-term growth avenue.
NVIDIA Q3: the bad
- Supply Constraints: Capacity for H200 and Blackwell GPUs remained constrained, limiting upside. Blackwell demand is expected to exceed supply into FY2026.
- Margin Pressure: Gross margins declined sequentially, reflecting higher costs for scaling Blackwell production. Margins are forecast to remain in the low 70s initially, improving in FY2026.
- Muted Q4 Guidance: Revenue guidance of US$37.5 billion (+70% YoY) signals steady growth but falls below the most optimistic forecasts, reflecting supply limitations.
NVIDIA Q3: Key implications:
- Long-Term Visibility: CEO, Jensen Huang emphasised that data centre modernisation will take several years, ensuring sustained demand for NVIDIA’s infrastructure.
- Broad-Based Growth: Diversification beyond Data Centres was evident, with Gaming and Automotive outperforming, though they remain relatively small contributors to overall revenue.
- Geopolitical Risks: China’s importance as a market continues despite export restrictions impacting Data Centre revenue. NVIDIA is complying with regulations while supporting customer needs.
NVIDIA Q3: the outlook
NVIDIA’s Q3 results reinforce its leadership in AI computing, with record Data Centre revenue and growth across Gaming and Automotive. While demand signals remain strong, supply constraints for H200 and Blackwell GPUs capped upside, and margin pressures continue during the early ramp of new products.
The long-term outlook remains positive, supported by AI adoption and sovereign investments. However, the market may need time to digest these results, as questions linger about the timing of margin recovery and the duration of ramp-related pressures. Shares may trade uneventfully or lack catalysts until the January quarter results provide greater clarity on execution and margin trajectory.