What Investors Need to Know Ahead of Nvidia Q3 Earnings

● The analyst consensus has Nvidia reporting revenue of $33.03 billion, up 82% year-over-year. The world's most valuable company’s stock has nearly tripled in 2024 driven by demand for the company’s family of AI chips—including its next generation Blackwell graphics processing units.

● Earnings are expected to be $0.70 per share in the third quarter, up 88.11% from the year-ago quarter.

Nvidia's performance has been dominated by its Data Center segment, which accounts for nearly 90% of total revenue (as of Q2 2025). This segment has been showing remarkable growth, which is expected to continue for the next few years.

According to Bloomberg consensus forecasts, Nvidia’s Data Center Q3 revenue is expected to reach $29.098 billion, representing a year-over-year increase of 100.48%.“We see Nvidia remaining the leader in the AI training and inference chips for data center applications,” analysts at Mizuho wrote, estimating that the company holds a dominant market share of nearly 95% in the space.

Based on Nvidia’s strong forecast for fiscal 2025, Morningstar analysts predict that Data Center revenue will rise by 133% to $111 billion in fiscal 2025. They also forecast a 23% compound annual growth rate for the three years thereafter, as strong growth in capital expenditures in data centers at leading enterprise and cloud computing customers.

The Gaming segment reported 16% year-over-year (YoY) growth in Q2 2025, while the Professional Visualization segment grew by 20%. Both segments are expected to maintain similar growth rates in Q3, though they remain overshadowed by the dominant Data Center segment's performance.

According to Bloomberg consensus forecasts, the Gaming segment is expected to achieve revenue of $3.07 billion in Q3, up 7.5% from the year-ago quarter.

Source: Bloomberg

Nvidia announced in August that its board of directors approved $50 billion of buybacks.

On the surface, Nvidia increasing its share buyback program could be viewed as a bullish sign for investors. Generally speaking, companies buy back stock when management believes shares are undervalued. Based on the past two years, Nvidia stock trades below its average price-to-earnings (P/E) and price-to-free cash flow (P/FCF) multiples.

Since the company's new Blackwell GPU is shaping up to be a massively successful product launch, there's reason to believe Nvidia stock is poised to break out. Such a move would come with valuation expansion and, therefore, a more pricey stock.

For these reasons, investors are closely watching to see if the company repurchased any stock during the fiscal third quarter at more reasonable valuations, prior to any Blackwell-driven tailwinds.

Analysts are growing increasingly confident in the artificial intelligence chip behemoth's prospects. At least five research firms raised their price targets on Nvidia ahead of earnings.

Susquehanna Financial Group analyst Christopher Rolland reiterated his positive rating on Nvidia stock and raised his price target to 180 from 160.

Rolland said his industry checks indicated sustained demand for Nvidia's current-generation Hopper series products, H100 and H200, ahead of the Blackwell series launch.

"We expect another strong quarter driven by healthy Hopper demand and early Blackwell ramps," Raymond James analyst Srini Pajjuri said in a client note. "Supply remains a wild card, which could limit near-term upside."

Pajjuri kept his strong buy rating on Nvidia stock and increased his price target to 170 from 140.

Additionally, Morgan Stanley’s Joseph Moore raised his target from $150 to $160, citing the impact of the upcoming Blackwell chips, which CEO Jensen Huang noted are experiencing intense demand.

However, Moore warned that the company might be impacted by supply chain constraints,“we are back to fully supply constrained on new products, which could limit upside on current quarter and outlook,” said Moore.

The options market overestimated Nvidia stocks earnings move 62% of the time in the last 13 quarters. The predicted move after earnings announcement was ±8.0% on average vs an average of the actual earnings moves of 8.0% (in absolute terms).

From the perspective of implied volatility skew, market sentiment is slightly bullish on Nvidia.Over the last 12 quarters earnings day, there has been a 67% probability of achieving positive returns, with the maximum gain reaching 24.4%.

Source: IBD, Investopedia, Market Chameleon