Nvidia's Financial Results Challenge AI Growth Longevity as Valuation Concerns Persist

Nvidia (NASDAQ: NVDA), currently the world's most valuable publicly traded company with a market cap of $4.5 trillion, is approaching a crucial moment as it gets ready to announce its third-quarter fiscal 2026 results after markets close on November 19, 2025. The performance of this AI chip giant is widely viewed as a key indicator for the ongoing AI-fueled stock rally, with Wall Street anticipating

based on signals from the options market. Despite a remarkable 1,200% gain over the past three years, Nvidia's shares dropped 8% in November, drawing sharp attention as investors debate its valuation, geopolitical uncertainties, and the strength of the AI infrastructure surge .

One major area of investor interest is Nvidia’s strategic partnership with

and Anthropic—a $15 billion collaboration, with $10 billion contributed by and $5 billion from Microsoft. Anthropic, the company behind the Claude chatbot, has agreed to purchase $30 billion in Azure computing resources powered by Nvidia’s Blackwell and Rubin chips, indicating strong and lasting demand for Nvidia’s AI hardware . Alongside Nvidia’s growing presence in Saudi Arabia—where U.S. export permissions for advanced chips could open up tens of thousands of units—this deal underscores both new growth opportunities and exposure to geopolitical risks . Nevertheless, ongoing restrictions on sales to China, once a key market for Nvidia’s lower-tier H20 chips, continue to cast uncertainty over the company’s long-term outlook .

Expectations for earnings are built on continued strong revenue growth. Analysts project third-quarter revenue between $54.6 billion and $54.9 billion, a 56% increase from the previous year, with the data center segment—driven by Blackwell AI systems—remaining the main driver . However, the size of Nvidia’s earnings beats has become less dramatic, and investors are expected to focus closely on guidance for the fourth quarter and beyond, especially as major cloud providers like Microsoft, Amazon, and Google continue to expand their AI infrastructure . Pressures on gross margins from the advanced Blackwell chip production and questions about whether multi-year GPU demand can be sustained may also impact investor sentiment .

The debate over Nvidia’s valuation has grown more heated as high-profile investors such as Michael Burry and SoftBank’s Masayoshi Son have reduced their stakes,

. Nvidia’s price-to-earnings ratio stands at 51.67, which is considered steep, but supporters argue that its leadership in the $500 billion AI infrastructure sector and clear multi-year demand from cloud companies justify the premium. Meanwhile, options trading suggests a 7–8% move after earnings, highlighting the crowded nature of the trade and heightened volatility .

Analysts maintain a cautiously positive outlook. BNP Paribas Exane and Stifel have both raised their price targets to $250, while Wolfe Research described the situation as a “classic marginal beat/raise”

. Still, some skepticism remains, with critics questioning if Nvidia’s valuation is truly supported by its fundamentals or if it is being inflated by circular investments, where funding AI startups leads to future chip sales .

As investors watch closely, the central question is whether Nvidia can maintain rapid growth and healthy margins while managing geopolitical challenges. A strong earnings beat with upbeat guidance could reignite enthusiasm for AI stocks, but any indication of slowing demand or shrinking margins might spark a sharp selloff. With the S&P 500 increasingly influenced by this AI giant, the stakes are exceptionally high.