Nvidia delivered a blockbuster earnings report that should have sent its stock soaring, but instead the chip giant faced a harsh market reality: even record-breaking results aren't enough to overcome growing concerns about competition and AI valuations.
On November 19, Nvidia announced $57 billion in quarterly revenue—a stunning 62% year-over-year increase that shattered expectations. CEO Jensen Huang declared the company had "entered the virtuous cycle of AI," with Blackwell chip sales described as "off the charts" and cloud GPUs completely sold out. Yet when trading opened the next day, investors sent the stock down roughly 3%, a stark reminder that dominance in the AI chip market doesn't guarantee smooth sailing.
The Earnings Blowout That Wasn't Enough
Nvidia's third quarter fiscal 2026 results were nothing short of extraordinary. Beyond the headline revenue figure, the company maintained a
gross margin exceeding 73%—a level of profitability that would make most tech companies jealous. The company also announced it would return
$37 billion to shareholders during the first nine months of fiscal 2026 through buybacks and dividends, with
$62.2 billion remaining under its repurchase authorization.
This marks at least the
fifth consecutive quarter where Nvidia has beaten analyst expectations. Historically, this track record has been a bullish signal—looking back at the past nine quarterly earnings reports, Nvidia advanced seven times in the six months that followed, with gains consistently in the double digits.
But the market's reaction suggested something has shifted in investor sentiment.
Google's TPU Challenge Rattles Confidence
The real culprit behind the post-earnings selloff wasn't the earnings themselves—it was a report that emerged around the same time that
Meta is considering using Google's tensor processing units (TPUs) in its data centers starting in 2027. The news sent Nvidia stock tumbling as much as
7% during the session before settling at a
2.6% decline.
This development strikes at the heart of Nvidia's competitive moat. The company currently controls
more than 90% of the AI chip market, a near-monopoly that has fueled its meteoric rise. But the market is now questioning whether that dominance is truly unshakeable.
Google is reportedly also pitching a program called
"TPU@Premises" to major financial institutions, directly competing with Nvidia in the lucrative on-premise data center chip market. The aggressive move signals that Nvidia's competitors are finally getting serious about challenging its stranglehold on AI infrastructure.
Nvidia Fights Back
The company didn't take the criticism lying down. Nvidia quickly posted on social media that it remains
"a generation ahead of the industry" and is
"the only platform that runs every AI model and does it everywhere computing is done." The company emphasized that its chips offer superior performance, versatility, and flexibility compared to specialized ASIC chips like Google's TPUs.
It's a compelling argument, but it also reveals the underlying anxiety: Nvidia feels compelled to defend its position in real-time against emerging threats.
What's Next for Nvidia Stock?
Despite the recent turbulence, analyst sentiment remains largely positive. The average Nvidia stock price target stands at
$243.09, suggesting upside potential of 32% from current levels. This implies Wall Street still believes in the company's long-term growth story, even as near-term concerns about competition and AI bubble valuations persist.
Nvidia stock has already soared an astounding
1,000% over the past five years, making it one of the best-performing mega-cap stocks in history. The question now is whether the company can maintain that trajectory as competitors finally begin to mount credible challenges to its dominance.
The stock currently trades around
$178, down from its 52-week high of
$212 in October. For investors, the earnings report proved that Nvidia's business fundamentals remain extraordinarily strong. But the market's reaction proved something equally important: even the world's most dominant chip maker isn't immune to competitive threats and valuation concerns.
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NVIDIA Announces Financial Results for Third Quarter Fiscal 20262.
Nvidia Stock Slumps 2.6% on Report That Meta Will Use Google's AI Chips3.
Should You Buy Nvidia Stock After the Company's Blowout Earnings Report?4.
NVIDIA Stock Price Quote - Morningstar5.
Nvidia Stock Price Target Analysis - TipRanks
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4. Should You Buy Nvidia Stock After the Company's Blowout Earnings ...
5. Nvidia Stock (NVDA) Slips ahead of Q3 Earnings as Investors Brace ...
6. NVIDIA Stock Price Quote - NASDAQ: NVDA - Morningstar
