Nvidia continues to deliver financial results that defy expectations, yet the market response tells a contradictory story. Despite posting astronomical numbers that crushed analyst forecasts, the chipmaker’s shares have encountered unexpected headwinds, leaving market participants questioning the disconnect between corporate performance and stock valuation.
The Profitability Question Overshadows Record Results
The underlying concern driving recent market sentiment revolves around AI profitability. Investors are increasingly questioning whether massive customer expenditures on AI infrastructure will ultimately generate sufficient returns. Reports of prominent investors like Peter Thiel scaling back positions have further fueled caution, casting doubt on the sustainability of the artificial intelligence boom that has propelled Nvidia’s growth.
This growing apprehension has overshadowed what should have been a celebratory period for the semiconductor giant. The company reported third-quarter revenue skyrocketing 62% to an astonishing $57 billion, figures that would typically trigger bullish momentum. Instead, after a brief rally, shares trended downward throughout the week, closing at approximately €155 on Friday and registering a weekly decline of nearly 5%.
Should investors sell immediately? Or is it worth buying Nvidia?
Operational Performance Defies Market Nervousness
From an operational standpoint, Nvidia’s dominance appears unchallenged. The company’s data center business alone now generates more revenue than competitors Intel and AMD combined. CEO Jensen Huang has characterized demand for the new “Blackwell” chips as extraordinary, suggesting supply will likely remain constrained for multiple quarters. The outlook for the final quarter remains exceptionally strong, with targeted revenue of $65 billion.
The current market environment presents investors with a complex dilemma. Nvidia continues to deliver record profits with margins exceeding 73%, yet stock market sentiment remains dominated by valuation concerns. This creates a tense environment where shareholders must weigh the company’s undeniable market power against persistent fears of sector overheating. The fundamental data and nervous market mood currently exist in stark opposition, leaving the investment community to determine which force will ultimately prevail.
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