Nvidia on Wednesday evening delivered better-than-expected quarterly results, with a guide that should impress even those with the highest of expectations. Revenue in the company’s fiscal 2026 third quarter grew 62% year over year to $57.01 billion, outpacing the $54.92 billion the Street was looking for, according to estimates compiled by data provider LSEG. Adjusted earnings per share for the three months ending Oct. 26 increased 67% to $1.30, also exceeding the consensus estimate of $1.25, per LSEG data. NVDA YTD mountain Nvidia YTD Talk about a strong showing. In addition to solid beats on the top and bottom lines, management guided current quarter sales to a level not only above consensus estimates but also above the so-called whisper number that was floating around. For those unfamiliar with the term, the estimates that most market watchers and participants, like the Club, cite come from sources like LSEG, FactSet, or Bloomberg – all market data platforms. These estimates are compiled from sell-side analysts, who work at the banks and firms that sell research. The whisper number, however, is what the buy-side – those who run money, like hedge funds, asset management firms, pension funds, and so on – is believed to be looking for. It sometimes happens that a stock can beat the consensus estimate and miss the whisper number, resulting in a stock move lower. Beating the whisper number, however, is an important feat as it means the company is doing even better than the ones running money and risking it on the company, expected – a very bullish sign. Nvidia shares jumped 5% in after-hours trading to $196, a step in the right direction back toward their record-high close of $207 on Oct. 29 and back toward a $5 trillion market cap. We’re reiterating our hold-equivalent 2 rating but bumping up our Nvidia price target to $230 per share from $225. Bottom line Management not only has visibility on just about 100% of the revenue the Street is modeling for next year, but appears to have indicated on the call that the $500 billion number CEO Jensen Huang called out in October is already growing. Helping to drive the growth, Huang explained that the world is currently undergoing three computing transitions simultaneously. First, Huang said there has been a shift from CPU-based general computing to GPU-based accelerated computing. (CPUs are central processing units, long seen as the brains and workhouses of traditional computers. GPUs are graphics processing units, which have become the heart and soul of AI workloads because they can complete many calculations at the same time. That parallel processing is a key advantage over CPUs.) Second, he said that AI is at a “tipping point,” transforming existing applications and enabling new ones. “For existing applications, generative AI is replacing classical machine learning in search ranking, recommender systems, ad targeting, click through prediction, to content moderation. The very foundations…
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