Nvidia Reports Strong Earnings While Amazon Boosts AWS Revenue

The artificial intelligence market is currently a focal point for investors, characterized by both robust company performance and significant market volatility. Nvidia, a key player in the AI chip sector, recently reported strong third-quarter earnings of $18.12 billion, surpassing analyst expectations. CEO Jensen Huang actively dismissed concerns about an AI bubble, emphasizing sustained demand for Nvidia's GPUs and projecting $20 billion in revenue for the fourth quarter. The company's CFO also confirmed a substantial $500 billion sales forecast for fiscal years 2025 and 2026, driven by the anticipated rise of "agentic AI" and the increasing need for computing power in data centers.Despite Nvidia's optimistic outlook, market sentiment remains mixed. Asian stock markets experienced sharp declines, with South Korea's KOSPI falling almost 4% and Japan's Nikkei sliding 2.2%, largely due to worries about high valuations in AI tech stocks and concerns over Nvidia's inventory and financing. Prominent investment manager Rajiv Jain of GQG Partners went further, warning that the current AI boom is a bubble poised to burst, potentially worse than the 1999 dot-com crash. He has reduced his AI investments, citing overly positive Wall Street views and differing market valuations compared to past bubbles.However, not all news was negative. SoundHound AI saw its shares jump 7.6% following Nvidia's strong results, which helped to alleviate some immediate fears of an AI market bubble. US stocks also rebounded after New York Federal Reserve President John Williams hinted at potential interest rate cuts, boosting hopes for a December reduction and reversing a previous slump in AI stocks.Beyond Nvidia, other companies are making significant strides in the AI space. Advanced Micro Devices (AMD) is emerging as a strong alternative for AI with its MI-series chips. Broadcom is assisting major tech companies like Alphabet and Amazon in designing custom AI chips, contributing to its AI revenue. Celestica provides crucial hardware such as switches and server racks for data centers, benefiting from the overall AI infrastructure build-out.Amazon, specifically, is gaining attention as an undervalued AI play, according to billionaire investor Stanley Druckenmiller, who recently bought Amazon stock. Its Amazon Web Services (AWS) division reported robust growth, with revenue increasing 20% year over year to $33 billion, partly fueled by its collaboration with AI startup Anthropic. Amazon is heavily investing in infrastructure while also improving profit margins in its e-commerce business.Meanwhile, Palo Alto Networks reported strong quarterly earnings, exceeding market predictions with growth in platform and subscription sales and forming new AI security partnerships, despite a recent 13.68% stock dip. Qnity Electronics also announced strong third-quarter results, driven by AI demand, and raised its full-year sales forecast, though its stock is down 21.4% this year. BigBear.ai, however, faces challenges from government budget cuts, attempting to boost revenue through acquisitions.

Key Takeaways

• Nvidia reported strong Q3 earnings of $18.12 billion, exceeding predictions, and forecasts $20 billion for Q4, with a $500 billion sales outlook for fiscal years 2025 and 2026.
• Nvidia CEO Jensen Huang dismissed AI bubble fears, citing growing demand for GPUs and the anticipated rise of "agentic AI."
• Asian stock markets experienced significant drops due to concerns over high AI tech valuations and worries about Nvidia's inventory and financing.
• Investment manager Rajiv Jain warned the current AI boom is a bubble worse than the 1999 dot-com crash, leading him to reduce his AI investments.
• SoundHound AI shares rose 7.6% following Nvidia's positive earnings, helping to calm immediate AI bubble concerns.
• US stocks rebounded after a Federal Reserve official hinted at potential interest rate cuts, increasing hopes for a December reduction.
• Advanced Micro Devices (AMD) is positioned as an alternative AI chip provider with its MI-series, while Broadcom helps Google and Amazon design custom AI chips.
• Billionaire investor Stanley Druckenmiller bought Amazon stock, viewing it as an undervalued AI play, with Amazon Web Services (AWS) revenue growing 20% to $33 billion, partly due to its work with AI startup Anthropic.
• Palo Alto Networks and Qnity Electronics both reported strong earnings driven by AI demand, despite recent dips in their stock prices.
• Celestica provides essential hardware like switches and server racks for data centers, benefiting from the broader AI infrastructure build-out.

Palo Alto Networks shows strong earnings despite stock dip

Palo Alto Networks (PANW) reported strong quarterly earnings, beating market predictions with growth in its platform and subscription sales. The company also formed new AI security partnerships. Despite this good news, the stock price dropped 13.68% in the last month, though it shows strong long-term gains. Many believe the stock is undervalued, with a fair value of $219.75, but its current price-to-earnings ratio is much higher than its competitors.

Qnity Electronics reports strong AI sales and raised outlook

Qnity Electronics (Q) announced strong third-quarter results, showing double-digit sales growth and higher profits due to AI demand. The company also increased its sales forecast for the full year. Despite these positive updates, the stock is down 21.4% this year. Its price-to-earnings ratio of 19.8x is lower than industry averages, suggesting it might be undervalued. However, a different model shows the stock could be overvalued at $74.90 compared to a $62.54 fair value.

Three AI stocks poised for big growth beyond Nvidia

Brian Paradza, a CFA, suggests three AI stocks that could grow more than Nvidia in 2026. Advanced Micro Devices (AMD) is becoming a strong alternative for AI, with its MI-series chips offering good value. Broadcom (AVGO) helps big tech companies like Alphabet and Amazon design their own custom AI chips, driving its AI revenue. Celestica (CLS) provides essential hardware like switches and server racks for data centers, profiting from the overall AI infrastructure build-out. These companies offer different ways to invest in the growing AI market.

Asian stocks fall as AI worries and rate hike fears grow

Asian stock markets dropped sharply on Friday, mainly due to worries about high valuations in AI tech stocks. Investors reacted negatively to Nvidia's third-quarter earnings, which showed concerns about inventory and financing. South Korea's KOSPI fell almost 4%, and Japan's Nikkei slid 2.2%, with major chipmakers like Samsung and SK Hynix affected. Additionally, expectations for a Federal Reserve interest rate cut in December decreased, and Japan faced pressure from rising inflation.

SoundHound AI stock jumps after Nvidia's strong results

Shares of SoundHound AI (SOUN), a voice AI technology company, rose 7.6% this morning. This increase followed strong earnings reported by chipmaker Nvidia. Nvidia's positive results helped calm fears about a potential bubble forming in the artificial intelligence market.

US stocks rebound as Fed official hints at rate cuts

US stocks bounced back on Friday after New York Federal Reserve President John Williams suggested the central bank has more room to lower interest rates. His comments increased hopes for a December rate cut, reversing a slump in AI stocks. On Thursday, the market saw a sharp drop despite strong Nvidia earnings, as worries about Fed rates grew. Major indexes like the S&P 500, Dow, and Nasdaq were down 2-3% for the week.

Investment expert warns AI market bubble will burst

Rajiv Jain, a top investment manager at GQG Partners, believes the current artificial intelligence boom is a bubble ready to burst. He thinks this market collapse could be worse than the 1999 dot-com crash. Jain has reduced his investments in recent months, even though it has hurt his short-term performance. He compares today's market to past bubbles, noting that Wall Street often presents an overly positive view. He also highlights differences in market valuations and growth expectations compared to the dot-com era.

BigBear.ai faces challenges from budget cuts

BigBear.ai is facing difficulties due to government budget cuts. The company recently made another acquisition, hoping this move will help increase its revenue growth. This news comes as the company navigates a challenging financial environment.

Nvidia CEO dismisses AI bubble fears, confirms strong sales

Nvidia CEO Jensen Huang dismissed worries about an artificial intelligence bubble, stating that demand for Nvidia's GPUs continues to grow. The company reported strong third-quarter earnings of $18.12 billion, exceeding analyst predictions. Nvidia expects $20 billion in revenue for the fourth quarter, and its CFO confirmed a $500 billion sales forecast for fiscal years 2025 and 2026. Huang believes "agentic AI" will further increase the need for computing power and data centers. Despite some concerns about revenue concentration, Nvidia maintains a diverse customer base.

Billionaire investor Stanley Druckenmiller buys Amazon stock

Billionaire investor Stanley Druckenmiller recently bought Amazon stock for his Duquesne Family Office, seeing it as an undervalued AI play. Amazon Web Services (AWS) showed strong growth, with revenue increasing 20% year over year to $33 billion, partly due to its work with AI startup Anthropic. While Amazon is investing heavily in infrastructure, its e-commerce business also continues to grow steadily. The company is also improving its profit margins by becoming more efficient after past overhiring.

Sources

• Palo Alto Networks (PANW): Evaluating Valuation After Strong Earnings and New AI Security Partnerships
• Qnity Electronics (Q): Assessing Valuation After Strong Q3 AI-Driven Sales Growth and Updated Guidance
• 3 AI Stocks I Like Better Than Nvidia
• Asia stocks slide as AI valuation fears batter tech, rate cut bets dwindle By Investing.com
• Why Is SoundHound AI (SOUN) Stock Soaring Today
• Stock futures little changed after market drops on renewed AI fears: Live updates
• Why the AI Bubble Is Poised to Burst, According to GQG’s Rajiv Jain
• Massive News for BigBear.ai Stock Investors
• Nvidia CEO Jensen Huang Rejects AI-Bubble Fears, Confirms $500 Billion Sales Forecast Through 2026
• Meet The Newest Artificial Intelligence (AI) Stock That Billionaire Stanley Druckenmiller Just Bought in His Duquesne Family Office