The market focus is on Nvidia. On Wednesday, after the market closes, the clear leader of the artificial intelligence semiconductor revolution will report earnings for its October 2025-ending quarter. In August, Nvidia projected that its revenues for the October quarter would reach about $54 billion. Since then, numbers have inched higher. Analysts are now forecasting revenues of $55.2 billion and earnings of $1.26. This would represent increases of about 55% for both earnings and revenues from the year-ago October quarter.
Looking forward, expectations are for the company to guide Wall Street to $61.29 billion in revenues with stable margins for Nvidia’s January quarter. Business is very strong for Nvidia, and analysts are convinced that the near-term outlook is positive. Demand for Nvidia’s chips exceeds supply by a ratio of 12:1. AI chips for data centers account for about 90% of Nvidia’s sales. But what are the expectations for the next few years? Is the AI buildout just about over, or is it just beginning?
The short answer is that there is no evidence that Nvidia will slow down anytime soon. At the end of October, CEO Jensen Huang said that the company had orders for $500 billion worth of accelerated computing chips. That would represent a growth rate of about 150% from the four-quarter run rate of the just concluded October quarter.
But Nvidia is supply-constrained. It can’t get enough chips from Taiwan Semiconductor Manufacturing Company, the world’s leading semiconductor fabricator. Consequently, Nvidia won’t generate revenues of $500 billion in 2026. But it is clear that Nvidia has strong visibility for revenues and earnings into 2027.
To illustrate the positive demand picture for Nvidia, earlier this month, Huang, while in Taiwan visiting TSMC, asked the company for a 50% increase in wafers for next year. In addition, in August of this year, Nvidia said that global AI data center capital expenditure could reach $4 trillion by the end of this decade. Analysts suggest that Nvidia can capture more than half of that $4 trillion. Some analysts believe that the company’s market capitalization could double in the next few years.
The bottom line is that the future is very bright. In the earnings call after the numbers are out, Huang will probably lobby openly to sell Nvidia’s most advanced semiconductor technology to China. Huang wants to lock China into United States-accelerated computing technology. Sales to China are a decision for President Donald Trump. Questions will almost certainly also be asked about how the development of Nvidia’s next generation of semiconductor architecture, Vera Rubin, is tracking.
A few other issues might be raised. Naysayers on AI and Nvidia say that its older chips have short useful lives of just a few years, not the six years that companies such as CoreWeave use for their depreciation schedules. A shorter life would mean that the balance sheets of the hyper-scalers are more leveraged than the market believes. But older Nvidia chips are still in high demand. Some analysts say that the useful life of Nvidia’s chips could be seven years or longer.
Circular financing is another issue. Nvidia provides loans to its customers who use the money to buy Nvidia chips. This, too, is a non-issue. The major vehicle companies provide financing for consumers to buy their cars. No one questions that.
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Is Nvidia losing share to AMD and in-house chips produced by companies like Alphabet?
The short answer is that maybe Nvidia is losing 1% to 2% of its market share, but the market is growing so fast that it really does not matter. Nvidia captures today, and will capture at least for the next few years, between 80% to 90% of the market for accelerated computing chips. It is significantly larger than its nearest competitor, AMD. Nvidia has more resources to invest in research and development. Nvidia runs fast to stay ahead. Nvidia should remain the clear world leader in AI chips for several more years.
The writer owns shares in Nvidia.
James Rogan is a former U.S. foreign service officer who has worked in finance and law for 30 years. He writes a daily note on the markets, politics, and society. He can be followed on X and reached at [email protected].
