Shares of Nvidia (NVDA) and Palantir Technologies (PLTR) are significant beneficiaries of the higher spending on artificial intelligence (AI) technology. Both of these companies have witnessed their stock prices soar this year, fueled by the rapid adoption of AI across industries. But while both are significant beneficiaries of the AI boom, Palantir recently grabbed the spotlight with its impressive Q3 earnings report.
Since Palantir released its Q3 earnings on Nov. 4, the stock has surged more than 45%. This rally shows the growing demand for its Artificial Intelligence Platform (AIP), which is quickly gaining traction among enterprise customers. Investors cheered the results, as Palantir’s AI-driven offerings continue to solidify its position in the market.
Now, attention turns to Nvidia, which is gearing up to report its Q3 earnings next week. The big question: will Nvidia’s stock mirror Palantir’s post-earnings surge?
There’s plenty of reason for optimism. Nvidia is the leader in graphics processing units (GPUs), a critical component powering the AI revolution. The company’s AI solutions are in high demand, from data centers to automotive. This has made Nvidia the top-performing mega-cap stock of the year, and expectations are high as its Q3 report approaches.
With this backdrop, let’s explore whether the momentum in Nvidia stock will continue after the Q3 earnings release.
A Look at Nvidia’s Q3 Expectations
Nvidia is set to release its third-quarter fiscal 2025 earnings after the closing bell on Wednesday, Nov. 20. The company projects revenue of $32.5 billion for Q3, marking a 79% year-over-year increase, albeit a moderation from the triple-digit growth seen in earlier quarters. This slowing growth rate is a natural outcome of Nvidia’s rapidly expanding revenue base.
Despite this, the company’s data center segment remains a powerhouse, and will likely contribute significantly to its top-line growth.
While the company’s margins could remain under pressure as the data center mix continues to shift to new products, its bottom line will likely get a significant boost from higher sales. Analysts expect Nvidia's Q3 earnings per share (EPS) to be $0.70, reflecting a year-over-year growth of about 84%.
Factors that Could Push Nvidia Stock Higher
Nvidia continues to solidify its position as a leading player in the AI space, driven by robust demand across its Hopper, Computing, and Networking platforms. As the company gears up to announce its Q3 results, several factors suggest that Nvidia could deliver impressive numbers, potentially boosting its stock price.
A major growth driver for Nvidia is its data center segment, which has grown sequentially by $4 billion each quarter over the past year. This segment’s revenue reached $26.3 billion in Q2, reflecting sequential growth of 16% and a staggering 154% year-over-year increase.
Looking ahead, the momentum in Nvidia’s data center business will likely continue, driven by ongoing demand from leading cloud service providers (CSPs) and large enterprises. A significant part of this growth is expected to come from continued adoption of the Hopper architecture. The latest Hopper H200 platform, which began ramping up in Q2, offers enhanced memory bandwidth and is increasingly favored by large CSPs and enterprises. With supply constraints easing, Nvidia anticipates sustained demand for Hopper products in the second half of fiscal 2025.
In addition to Hopper, Nvidia is gearing up to launch its next-generation Blackwell platform. Early demand for Blackwell has been overwhelming, with orders already exceeding available supply. Nvidia expects Blackwell to generate several billion dollars in revenue in Q4, providing a solid foundation for continued expansion and potentially fueling further stock price growth in fiscal 2025.
Nvidia's networking segment is also seeing rapid growth, fueled by increasing demand for Ethernet solutions tailored to AI applications. As more companies seek high-performance networking capabilities to support AI workloads, Nvidia’s networking products are gaining momentum, and are likely to contribute significantly to its Q3 revenue and beyond to further diversify the company's income streams.
What’s Next for Nvidia Stock?
If Nvidia meets its Q3 targets and offers positive guidance for Q4 and the upcoming fiscal year, the stock could experience a significant jump, much like Palantir's recent rise.
Further, Wall Street is optimistic about Nvidia's prospects as the company approaches its Q3 earnings release, reflected through the “Strong Buy” consensus rating.
