Financial Report Outlook | AI Chip Giant NVIDIA Corporation (NVDA.US) Faces Major Test Again, Wall Street Bets on "Exceeding Expectations + Raising Guidance"

NVIDIA Corporation (NVDA.US) will announce its financial report for the third quarter of fiscal year 2026 after hours on November 19, with earnings expected to once again exceed expectations, with adjusted earnings per share estimated at $1.26; the market also expects the company's revenue for this quarter to be $55.28 billion, over 55% higher than the same period last year. Data center business as core engine NVIDIA Corporation's third-quarter revenue may benefit from its strong and continued data center business. As the trend of hybrid work modes becomes increasingly popular, the adoption rate of cloud solutions continues to rise, expected to boost demand for its chips in the data center end market. The growth in demand for hyperscale and inference market adoption rates may provide tailwinds for this reporting quarter. The data center end market business is expected to benefit from the growing demand for generative AI and large language models using NVIDIA Corporation's Blackwell architecture-based GPUs. Strong demand for its chips from large cloud services and consumer internet companies is expected to drive revenue growth in this segment for this reporting quarter. The estimate for data center third-quarter revenue is $48.04 billion, showing a robust year-on-year increase of 56.1%. Additionally, NVIDIA Corporation's third-quarter performance may benefit from a revival in its gaming and professional visualization end markets. In the past nine quarters, the gaming end market's performance improved year-on-year in seven quarters, as channel partner inventory levels have normalized. The company's gaming products also recorded strong demand in most regions. The model estimate for gaming end market third-quarter revenue is $4.71 billion, indicating a 43.7% increase over the same period last year. The performance of NVIDIA Corporation's professional visualization division also reflects a recovery, with revenue increasing for eight consecutive quarters. This trend is expected to continue in the third quarter. The model estimate for third-quarter professional visualization end market revenue is $678.9 million, showing a 39.7% increase over the same period last year. The company's automotive division has shown some improvement in trends in the past six quarters. This positive trend may continue in the third quarter of the fiscal year due to increased investment in autonomous driving and AI smart cockpit solutions. The model estimate for automotive end market third-quarter revenue is $624.8 million, requiring a 39.1% year-on-year increase. Biggest winner in the generative AI wave Over the past year, NVIDIA Corporation's revenue growth has been driven by strong demand for chips needed for developing generative AI models. NVIDIA Corporation dominates the generative AI chip market, which has proven useful in multiple industries including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy and utilities, and video game development. The increasing demand for modernized workflows across industries is expected to drive demand for generative AI applications. According to the latest report from Fortune Business Insights, the global generative AI market is expected to reach $967.65 billion by 2032. The market is expected to grow at a compound annual growth rate of 39.6% from 2024 to 2032. Stock price has surged over the past year The complexity of generative AI requires extensive knowledge and significant computational power. This means that businesses will need to significantly upgrade their network infrastructure. NVIDIA Corporation's AI chips, including A100, H100, B100, B200, B300, GB200, and GB300, are the preferred choice for building and running these powerful AI applications, making the company a leader in this field. With the unfolding generative AI revolution, it is expected that NVIDIA Corporation's advanced chips will drive significant revenue and market position growth. Consistently positive outlook from Wall Street As a leader in the semiconductor industry, NVIDIA Corporation benefits from its dominant position in the GPU field and strategic expansion into AI, data centers, and autonomous driving cars. The company's strong product portfolio, leadership position in AI, and relentless innovation present an attractive investment opportunity. Analysts at Jefferies Financial Group Inc. and Wedbush recently stated in their reports that they expect this AI giant to "exceed expectations and raise guidance," meaning the financial indicators reported are better than analysts' predictions and future forecasts are improved. "The third-quarter hyperscale capital spending results were generally above expectations," wrote Wedbush analysts, who maintained their $210 target price. "More importantly, most of the large hyperscalers have indicated that they expect future period spending trends to increase as they continue to expand investment to support their AI plans." Wedbush analysts noted that spending growth from "large hyperscalers" such as Microsoft Corporation, Alphabet, and Amazon.com, Inc. has largely flowed to NVIDIA Corporation, as this chip manufacturer "provides a disproportionate amount of value in AI server." However, some investors and analysts are beginning to question how much these major tech companies are willing to spend before seeing a clearer path to return on investment. Meanwhile, many market participants have been looking for signs of a bubble. Analysts at Bank of America Corp. maintained their target price of $275, stating that they expect NVIDIA Corporation executives to assure investors of their ability to meet demand, and noted the company faces high profit expectations and increasing skepticism around AI spending. UBS analysts raised NVIDIA Corporation's target price earlier this week, calling the chip manufacturer the "most likely single company to win in the AI field."