Nvidia (NASDAQ: NVDA) announced its fiscal third quarter 2025 financial results after the market close on Wednesday, beating analyst expectations across key metrics. But despite the strong results, the company’s stock price has since fallen, reflecting investor concerns about the outlook for the fourth quarter and rising costs.

At the time of writing, the stock is trading 3.22% lower at $141.95.

Key results exceeded expectations

The AI ​​chip leader reported earnings per share (EPS) of US$0.81 and revenue of US$35.1 billion, beating Wall Street’s expectations for EPS of US$0.74 and revenue of US$33.2 billion. Nvidia’s data center business, which accounts for the majority of its revenue, generated US$30.8 billion, up 112% year over year, well above the US$29 billion expected by analysts. Gaming revenue also increased, reaching US$3.3 billion from US$2.8 billion a year ago.

CEO Jensen Huang emphasized that the results reflect Nvidia’s role at the forefront of the AI ​​era, saying: “Demand for Hopper and full production expectations for Blackwell are growing incredibly as fundamental model makers scale pre-training, post-training, and inference.”

Hopper and Blackwell are GPU architectures designed to power demanding AI workloads. Named after computing pioneer Grace Hopper, Hopper is powered by the flagship H100 chip, designed for training and deploying large-scale AI models such as those used in natural language processing and generative AI. Optimized. Nvidia’s next-generation GPU, Blackwell, is expected to build on Hopper’s success with advances in processing power and efficiency.

Market reaction to expected results mixed

The report was highly anticipated, as Nvidia rides a wave of AI-driven growth that has pushed its stock up more than 190% since the beginning of the year. However, investors’ enthusiasm was muted. After briefly hitting an intraday high, the stock fell as the market digested the company’s fourth-quarter forecast.

Nvidia expects fourth-quarter revenue to reach US$37.5 billion (plus or minus 2%), slightly above the consensus estimate of US$37 billion, but with a more bullish estimate of US$41 billion. below. In addition to the cautious outlook, sentiment was also dampened by a decline in gross profit margin forecast to 73.5% from 75% in the third quarter.

Reasons for stock price decline

The drop in stock price reflects that expectations for Nvidia were so high that even strong results are not enough to sustain the company’s impressive gains. Concerns about rising production costs for next-generation Blackwell chips also weighed on sentiment. CFO Colette Kress acknowledged continued supply constraints and predicted demand for Blackwell GPUs would outstrip supply for several quarters.

Furthermore, geopolitical risks are also looming. President-elect Donald Trump’s proposed tariffs on Taiwanese chips critical to Nvidia’s supply chain could eat into margins and increase costs for customers. Taiwan Semiconductor Manufacturing Company (TSMC) is the primary manufacturer of Nvidia’s GPUs.