5 Metrics Capture Nvidia's Mind-Boggling Growth

In the debate over whether AI (artificial intelligence) spending is peaking or only getting started, Nvidia (NASDAQ: NVDA) just delivered another quarter that strongly supports the latter view. The AI chip specialist reported record results, pointing to a still-growing pipeline of demand as cloud providers race to build new AI infrastructure.

The quarter was impressive by every measure. Nvidia's revenue growth accelerated again, profitability remained unusually high for a chipmaker, the company continued buying back its stock, and management guided for a huge sequential step-up in sales.

Taken together, five metrics from the company's third-quarter fiscal 2026 report capture just how quickly the business is scaling, showing what's behind Wall Street's love for the stock this year.

Image source: Getty Images.

1. Accelerating revenue growth

The first number that stands out in Nvidia's third-quarter report is its revenue of $57.0 billion, up 62% year over year and 22% versus the second quarter of fiscal 2026. Importantly, that growth rate marked Nvidia's first year-over-year revenue growth acceleration after six straight quarters of deceleration.

Data center revenue did most of the heavy lifting. Sales in that segment reached $51.2 billion -- an increase of 66% from a year earlier and 25% sequentially, as customers bought more Blackwell-generation accelerators and high-bandwidth networking hardware to power AI training and inference workloads.

Data center products now account for almost all of Nvidia's growth, showing how central the company has become to modern AI infrastructure.

2. Staggering margins

Rapid top-line growth would be far less impressive if it came with heavy discounting. Yet Nvidia's gross margins remain unusually strong. On a non-GAAP basis, third-quarter gross margin was 73.6%, up from 72.7% in the second quarter.

On a similar note, non-GAAP operating income reached $37.8 billion, rising 62% year over year and 25% sequentially, which implies an operating margin in the mid-60s percent range. That is rare territory for a chip designer selling into intensely competitive data center markets. It reflects Nvidia's lead in the market, which enables it to charge premium prices.

3. Substantial share repurchases

What's probably even more impressive than Nvidia's growth is the fact that it generates so much excess cash flow that it's able to reinvest in cutting-edge AI chip design while also returning substantial sums of capital to shareholders. During the first nine months of fiscal 2026, the company spent $36.3 billion on share repurchases and paid $732 million in cash dividends, returning about $37.0 billion to shareholders in total.

There's more firepower where that came from. Nvidia still had $62.2 billion remaining under its current share repurchase authorization as of the end of the third quarter.

4. Impressive guidance

Management's fourth-quarter guidance offers another window into Nvidia's momentum. Management expects revenue of $65.0 billion, plus or minus 2%. Using last year's fourth-quarter revenue of $39.3 billion as the base, the midpoint implies roughly 65% year-over-year growth and about 14% sequential growth from the latest quarter.

5. Soaring earnings

The fifth metric is earnings per share. On a non-GAAP basis, third-quarter earnings per share came in at $1.30, up 60% year-over-year and 24% versus the second quarter. Generally accepted accounting principles (GAAP) earnings per share rose 67% year over year to $1.30 as well.

Overall, these five metrics show a business that is still in full expansion mode despite its size.

These figures align with Nvidia CEO Jensen Huang's bullish on AI demand in general and, of course, Nvidia's positioning within this period of wild growth.

"Blackwell sales are off the charts, and cloud GPUs are sold out," said Nvidia CEO Jensen Huang in the company's third-quarter earnings release. "Compute demand keeps accelerating and compounding across training and inference -- each growing exponentially. We've entered the virtuous cycle of AI."

Of course, investors have already priced in this excitement. Shares trade at a forward price-to-earnings ratio of 24. While that may not sound high, investors should keep in mind that the semiconductors have always been a cyclical industry. When supply finally catches up to demand, growth rates can slow down, and margins may narrow significantly. Still, this isn't an egregious valuation -- especially if we are still early in this AI boom, like Huang seems to think we are.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.