NVIDIA’s Blackwell Chips Ignite Record Demand in Q3

NVIDIA’s Blackwell Surge

Tech investors and growth-focused funds will be breathing a sigh of relief after NVIDIA (NASDAQ: NVDA) delivered one of its strongest quarters to date, posting record revenue of US$57 billion, up 62% year on year. The standout driver was its data centre division, which reached a record US$51 billion, climbing 66% from a year earlier. For many investors, this result wasn’t just another earnings beat; it was a crucial test for the broader AI investment cycle. Leading into the announcement, sentiment across markets had been cautious, with some fearing that a weak print could trigger the long-anticipated “AI bubble” unwind. Instead, NVIDIA’s results painted a clear picture of resilience and continued infrastructure demand across AI and cloud workloads.

But the strength doesn’t stop there. Taiwan Semiconductor Manufacturing Company (NYSE: TSM) also remains a bellwether to watch. As the world’s leading chip manufacturer, its advanced 3nm and 5nm wafer nodes continue to see robust demand. This quarter, TSMC reported US$33 billion in revenue, representing 40% year-on-year growth, another signal that the global data centre build-out is far from slowing.

From a broader market perspective, these results reaffirm that AI infrastructure spending remains in its early innings. While valuations across the sector are undeniably rich, the underlying demand trends continue to justify investor optimism, at least for now.

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Here is what Jensen had to say

CEO Jensen Huang said demand for Blackwell, NVIDIA’s latest high-performance GPU architecture, has been “off the charts,” with cloud GPUs now completely sold out. He added that “compute demand keeps accelerating and compounding across training and inference,” underscoring how deeply AI infrastructure demand is embedding into the global economy. CFO Colette Kress reinforced this momentum, noting visibility to more than US$500 billion in combined Blackwell and Rubin revenue through the end of 2026.

NVIDIA has a powerful ecosystem of partnerships

NVIDIA’s new Blackwell chips are not only faster but dramatically more efficient. The company highlighted that Blackwell delivers up to 10 times the performance per watt compared with the previous generation. In practical terms, for every megawatt of electricity consumed, these chips can handle around ten times more AI computation. This leap in efficiency is critical for the economic viability of hyperscale data centres, where energy represents a major cost driver. By reducing energy intensity, customers can achieve far better unit economics while scaling AI workloads.

Beyond technology, NVIDIA continues to strengthen its strategic partnerships across the AI ecosystem. The company is working with OpenAI to deploy 10 gigawatts of NVIDIA systems for OpenAI’s next-generation infrastructure, while also collaborating with Google Cloud, Microsoft, Oracle, and xAI to build America’s AI backbone powered by hundreds of thousands of NVIDIA GPUs. Notably, NVIDIA and Oracle are co-developing one of the US Department of Energy’s largest AI supercomputers, featuring 100,000 Blackwell chips, a move that cements NVIDIA’s role at the centre of the global AI build-out.

US TSMC makes first Blackwell chips

Another major highlight was TSMC’s milestone of producing its first Blackwell chips at its Arizona facility. This is a strategically significant development. For years, most of TSMC’s advanced chip manufacturing has been concentrated in Taiwan, a region viewed as a geopolitical flashpoint. The successful production of NVIDIA’s Blackwell chips on US soil provides critical validation that cutting-edge semiconductor manufacturing can now occur domestically.

Is Nvidia a good investment

The takeaway for investors is that while NVIDIA remains exceptionally strong, with its competitive moat deepening and Q4 guidance pointing to continued strength in both topline growth and margins, the market narrative is already running far ahead of fundamentals. NVIDIA is not just a company at this point; it is the core catalyst for the broader AI story, and much of the market’s optimism about AI adoption and transformation is anchored to its success.

That said, expectations are now extremely elevated. The share price already reflects years of stellar performance ahead, leaving almost no margin for error. Any sign of slowing demand, margin compression, or moderation in data centre spending could quickly unwind this optimism. In the near term, it is likely that the tech sector stabilises, as investors digest NVIDIA’s record-breaking results and recalibrate expectations. The longer-term story remains powerful, but with sentiment this stretched, even great news can start to feel priced in.