The poster child for the artificial intelligence boom reported third-quarter earnings after the closing bell, and it did not disappoint.

Record sales and robust guidance drove Nvidia shares higher in after-hours trading for the AI bellwether, reassuring a market rattled by fears of an AI bubble.

“There has been a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang told analysts on an earnings call. “From our vantage point, we see something very different."

Wall Street had anticipated another quarter of growth from Nvidia’s AI chip business. Nvidia surpassed those expectations, earning $1.30 per share on $57 billion in sales. Analysts expected earnings per share of $1.25 on $54.9 billion in sales.

Huang said Nvidia has seen "off the charts" demand for its Blackwell chips.

The street was also looking for fourth-quarter guidance of $61.4 billion. Nvidia topped that, projecting revenue of $65 billion, give or take.

Huang said last month that Nvidia had more than $500 billion in sales in the pipeline for the next few quarters. Chief financial officer Colette Kress told analysts upcoming sales may exceed that.

The better-than-expected report boosted shares 5% at the time of publication. Nvidia is closely watched because any shift in share price can have major implications for the markets. The chip giant accounts for 8% of the S&P 500 index.

"Monster quarter," Wedbush Securities analyst Dan Ives said. "Tonight the markets and tech stocks got a pop the champagne moment with Nvidia's robust earnings and guidance. ... Fears of an AI Bubble are way overstated in our view. This is another validation point for the AI revolution."

Why Nvidia is such a market force

Nvidia makes the chips that are crucial to training and running AI models, and the red-hot market for AI has turned Nvidia into the world’s most valuable company.

"The old Wall Street adage 'one stock does not a market make' − that would be incorrect here," Neil Azous, portfolio manager of the actively managed Monopoly ETF that holds Nvidia shares, told Reuters. "Nvidia has the ability to make a market."

Why the market is worried about an AI bubble

But market jitters over a possible AI bubble still lurk.

Generative AI has sparked a record rally in technology stocks this year as investors bank on it to revolutionize business and the world.

What’s unsettling market nerves is that no one knows how long that transformation will take, and AI’s spending spree – and growing piles of debt to finance it – has shaken the market’s faith.

Growing concerns of an AI bubble triggered a sharp pullback and bogged down indexes in recent weeks. The S&P 500 recorded its longest losing streak since August.

What would happen if an AI bubble burst?

During an interview with the BBC, Google parent Alphabet CEO Sundar Pichai called out “elements of irrationality” in the current wave of AI investments and soaring valuations.

Google could weather the storm of an AI bubble bursting, Pichai said, but "I think no company is going to be immune including us."

Identifying a bubble is tricky, but for the first time in two decades, more than half of global fund managers polled by Bank of America said they were concerned that companies were spending too much on their investments.

Going into 2026, nearly half said an AI bubble is investing’s biggest “tail risk” – a risk with low probability but an extreme impact.

'Foundational piece of this AI revolution'

Not helping matters for Nvidia were recent moves to jettison their holdings by a few large investors, including tech billionaire Peter Thiel’s hedge fund and Softbank CEO Masayoshi Son.

Nvidia faces other challenges. Restrictions on shipping chips to China have closed off a massive market. So far Huang has not succeeded in lobbying Washington to overturn those restrictions.

Some on Wall Street also worry that deals Nvidia strikes that involve investing in AI startups such as OpenAI and Anthropic are artificially boosting demand.

Nvidia shares fell more than 4% this week as skittish investors braced for its third-quarter results. They rallied ahead of Nvidia's Wednesday, Nov. 19, earnings release.

Ives dismisses bearish outlooks. He calls Nvidia “a foundational piece of this AI revolution.”

“It all comes down to gauging the AI Revolution demand story which starts and ends with Nvidia,” Ives said in a research note.

This article originally appeared on USA TODAY: What AI bubble? Nvidia stock rises as it beats Wall Street forecast

Reporting by Jessica Guynn, USA TODAY / USA TODAY

USA TODAY Network via Reuters Connect