What more can be said about Nvidia (NVDA) that hasn’t already been said? The company has now delivered, not one, not two, but three breathtaking quarters in a row. But it’s now worth asking whether the semiconductor giant has become a victim of its own success.

Unlike previous quarter, NVDA stock didn’t respond the way investors hoped they would after the company blew away expectations. On the heels of the company’s Q3 results, the stock fell almost 5% from $500 to $478, while losing 3% last week. But despite the dip, investors can take solace in the fact that the company — by its guidance — continues to answer the most important question that has been on the minds of investors: namely, whether the euphoria surrounding artificial intelligence (AI) and generative AI is more than just hype.

There continues to be relentless demand for AI, especially in the datacenter, where the company’s revenue of $14.51 billion surged almost three-fold (280%) on a year-over-year basis, while rising 41% from the previous quarter. Gaming revenues also rose by 81% over Q3, while and Professional Visualization posted revenue growth of 108%. The numbers are breathtaking considering the consistently high expectations Nvidia was facing entering the quarter. Remarkably, amid all of that, Nvidia continues to find ways to impress.

“Our strong growth reflects the broad industry platform transition from general-purpose to accelerated computing and generative AI,” said Jensen Huang, founder and CEO of Nvidia. Adding, “NVIDIA GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off.”

Let’s look through the rest of the numbers. For the third quarter, Nvidia reported adjusted EPS of $4.02, which not only breezed past analysts expectations, but EPS rose almost six times from last year’s quarter, while rising 49% sequentially. Q3 revenue also crushed Street estimates by a staggering 22%, coming in at $18.12 billion, up 206% year over year and 34% from the second quarter. Overall, the analyst consensus was expecting the company to earn $3.10 per share on revenue of $14.89 billion.

The company’s execution is also highlighted by its money-making efficiency. Q3 gross margins were 75% (adjusted), rising close to 19 percentage points from the year-ago quarter. Just as impressive, Q3 operating expenses rose by just 13%. That double-digit percentage increase might sound like a big number, but when considering that Q3 revenue growth well above 200%, it means Nvidia paid very little for that growth, yielding adjusted profit of more than $10 billion, up nearly 600% year over year.

Looking ahead, for Q4 Nvidia said it expects fourth-quarter revenue at $20 billion, plus or minus 2%, well above the $18.35 billion that analysts were expecting. With a Q4 guidance that projects almost tripling the revenue growth for the third quarter a year ago, Nvidia signaled that the AI party is far from over. What’s more, when adding the company’s revenue totals for the first three quarters of the year and factoring it’s Q4 guidance, Nvidia is projected to deliverer fiscal 2023 revenue of close to $60 billion.

If achieved, not only would the $60 billion come in at 12% higher than current consensus of $53.7 billion, it which would mark a year-over-year increase of 122%. Consider that, a year ago, the Street was expected a ‘mere’ $27.5 billion for fiscal 2023, reflecting an increase of close to 90%. In other words, if there were any concerns about Nvidia’s valuation, the Q3 results and Q4 guidance have put those questions to rest. Nvidia stock remains a strong Buy given that the company’s fundamentals continue to improve evidenced by its margin improvement.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: Earnings Feed: Nvidia Stock (NVDA): Enjoying Another Blowout Quarter