Nvidia (NVDA) released its Q3 earnings report on Wednesday night, delivering impressive results that exceeded Wall Street's expectations for both revenue and profit. However, the company’s outlook for Q4 revenue came in slightly below analysts' forecasts, and its margins are under pressure, prompting a modest dip of 2.5% in after-hours trading.

While an immediate negative market reaction is expected, considering investors’ high expectations from the company and the significant rally in its stock, any pullback presents an excellent opportunity to buy this high-growth company - and in fact, the shares are now pointing slightly higher in pre-market trading, suggesting that investors are already re-thinking their initial response.

Nvidia, the top player in the artificial intelligence (AI) sector, is poised for massive growth. As companies worldwide ramp up spending on AI-driven technology and infrastructure, Nvidia is uniquely positioned to benefit from this trend, thanks to its dominance in high-performance GPUs and AI-focused solutions.

Let’s examine its Q3 performance more closely to determine why Nvidia stock is a buy on any pullback.

Data Center Momentum: Nvidia's Growth Engine

Nvidia’s data center segment is the star of its business, achieving record-breaking revenues in Q3. The segment posted $30.8 billion in revenue, representing a 17% sequential increase and an impressive 112% year-over-year growth. Notably, Q3 marked the sixth consecutive quarter in which Nvidia has grown this segment's top line by about $4 billion sequentially.

Key highlights driving this growth include:

• Surging Demand for the NVIDIA Hopper Platform: Sales of the NVIDIA H200 surged to double-digit billions, marking the fastest product ramp in the company’s history. The H200 platform offers up to 2x faster inference performance and a 50% improvement in total cost of ownership (TCO).
• Cloud Service Providers (CSPs) Support Growth: CSPs accounted for roughly half of Nvidia’s data center revenue, with year-over-year sales more than doubling. These providers are scaling Nvidia’s AI infrastructure to meet the rising demand for AI training and inference workloads.
• AI Models and Generative AI Growth: Nvidia’s Hopper and Ampere architectures power next-generation AI models, generative AI workloads, and deep learning engines for cloud and enterprise customers. As the largest inference platform globally, Nvidia continues to dominate this space.

Looking ahead, Nvidia's Blackwell chip products are ramping up. With demand already outpacing supply, Blackwell is expected to drive significant growth in 2025. Nvidia shipped 13,000 GPU samples in Q3, highlighting strong customer interest in this platform.

Demand for Blackwell products is far outstripping supply, and Nvidia is poised to exceed its revenue estimates for Blackwell, which could reach several billion dollars in Q4 as supply visibility continues to improve.

Gaming Revenue to Stabilize

Nvidia’s gaming segment delivered $3.3 billion in revenue for Q3, a 14% sequential and 15% year-over-year increase. Back-to-school demand fueled strong sales of GeForce RTX GPUs, which are popular among gamers and creators for powering gaming, creative applications, and AI use cases.

While the potential supply constraints in Q4 will lead to a sequential decline, Nvidia remains well-positioned for the holiday season. The gaming segment will likely rebound as these issues are resolved. The segment's long-term prospects remain solid, with AI applications further bolstering demand.

Expanding Horizons: Professional Visualization and Automotive

• Professional Visualization: Nvidia's RTX workstations continue to dominate the market for professional graphics, design, and engineering applications. Q3 revenue in this segment reached $486 million, up 7% sequentially and 17% year-over-year. Generative AI is also emerging as a growth driver for content creation and productivity-related tools.
• Automotive: Nvidia’s automotive revenue hit a record $449 million, a 72% year-over-year increase. The ramp-up of Nvidia Orin, its self-driving platform, is a key growth catalyst, with automakers like Volvo (VLVLY) leveraging this technology for their electric SUV lineup.

The Road Ahead: A Strong Buy Opportunity

While Nvidia’s Q4 revenue forecast came in slightly below expectations, the company's long-term growth trajectory remains robust. Analysts remain bullish, with a “Strong Buy” consensus rating.

Nvidia’s gross margins will likely stabilize as Blackwell's production ramps up. Once fully operational, Blackwell could achieve mid-70% gross margins, further strengthening the company’s profitability. As Nvidia continues to scale its AI infrastructure investments and deliver industry-leading solutions, its growth story remains intact.

The Bottom Line on NVDA Stock

Nvidia’s leadership in AI, stellar data center growth, and innovative product pipeline positions it well to deliver solid growth. Given that, any pullback in Nvidia stock will likely be short-lived, presenting opportunities for long-term investors to capitalize on temporary dips.