Nvidia’s Strong Earnings Reinforce AI Momentum Amid Rising Concerns Over Circular Financing

NVIDIA Posts Outstanding Q3 Results

NVIDIA has released its latest quarterly earnings, reaffirming its leadership in the global AI supply chain. For the third quarter, the company reported $57 billion in revenue, up more than 60% year over year. The data center segment, a focal point for the market, generated $51.2 billion—well above expectations.

NVIDIA also issued an optimistic forecast for the upcoming quarter, projecting revenue of $65 billion. This figure significantly surpasses analysts’ consensus estimate of $61.6 billion. After the report, NVIDIA’s shares increased significantly in after-hours trading, further strengthening market confidence in persistent demand for AI infrastructure.

(Source: Jinshi Data)

CEO Jensen Huang highlighted that demand for the latest Blackwell architecture GPUs continues to surge, with cloud customers fully reserving all available units.

Capital Keeps Flowing into AI, but Aggressive Investment Fuels Market Concerns

While NVIDIA’s growth remains strong, leading tech stocks have recently faced sell-offs. Investors worry that companies, in their race to build the most advanced AI models, are investing too aggressively in data centers and high-end chips. This rapid spending could pose short-term risks if returns fail to materialize, raising concerns about overinvestment.

Recent partnership models among AI companies have also sparked debate. Critics have labeled these deal structures as “circular financing,” wherein AI chip suppliers like NVIDIA fund their customers, who then use the capital to develop new services and purchase additional chips.

Many startups embraced this approach a few months ago, which drove up their valuations. However, NVIDIA’s latest collaborations with Microsoft and Anthropic have increased market caution, as some now believe these deals could introduce systemic risk.

Professional Investors: AI Bubble Risk Is Rising

A recent Bank of America fund manager survey found that 45% of global respondents consider a bubble in AI-related stocks one of the top market risks. Despite NVIDIA’s robust performance, uncertainty persists over the health of AI capital flows, the potential for overheated infrastructure investment, and the pressure that suppliers may face if future demand declines.

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Conclusion

NVIDIA’s Q3 report highlights its critical industry role and the booming demand for AI. Yet, rising market concerns remind investors to watch short-term investment cycles, the rate of corporate investment, and the long-term health of AI business models. While AI’s growth trajectory remains strong, investors are shifting from exuberance to a more cautious, analytical stance. They are seeking a balance between breakthrough innovation and prudent capital allocation.