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Nov. 19 (UPI) — Tech giant Nvidia on Wednesday posted record revenue and strong profit for the third quarter, beating Wall Street expectations, amid exploding growth in artificial intelligence.

Nvidia, which has the world’s largest market capitalization at $4.5 trillion, reported record sales. It said sales grew 62% in one year to $57 billion through Oct. 26. Wall Street had projected a $54.9 billion figure.

On Oct. 29, Nvidia became the first company worldwide with a $5 trillion cap one day before CEO Jensen Huang met with President Donald Trump in the White House.

“There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different,” Huang said during a conference call with investors.

Fourth-quarter sales are estimated to be around $65 billion, contrasting with $61.66 billion by analysts.

Profit was up 65% from last year in the quarter to $31.9 billion or 78 cents per share, slightly ahead of expectations. The net income represents 58% of revenue.

NVIDIA will pay its next quarterly cash dividend of 1 cent per share on Dec. 26.

Nvidia builds chips and software platforms for the AI industry. The company, founded in 1993 in the Silicon Valley in California, pioneered the graphics processing unit, initially for 3D video games.

The chips are made in the United States by GlobalFoundries, Taiwan Semiconductor Manufacturing Company and Samsung in South Korea. Taiwan’s new factory in Arizona focuses on chips for Nvidia.

The design work is done in the United States, GeekBitz reported.

Most AI companies’ technology runs on Nvidia’s chip, CNN reported.

Its best-selling chip is the Blackwell Ultra, a second generation. The company is banned from selling the new ones to China.

“Blackwell sales are off the charts, and cloud GPUs are sold out,” Huang said in a statement about its best-selling chip.

“Compute demand keeps accelerating and compounding across training and inference — each growing exponentially. We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”

In October, Huang said there were $500 billion in AI chip orders for 2025 and 2026 combined.

“The number will grow,” Nvidia finance chief Colette Kress said during the earnings call with analysts.

Nvidia said there were $51.2 billion in revenue in data center sales, a 66% rise year-over-year.That includes $43 billion in revenue was for “compute,” or the GPUs. The company said most growth was from GB300 chips.

Nvidia’s stock price rose 5.08% in after-hours trading on Wednesday night on NASDAQ. The stock was at $196.00, below the record $207.04 on Oct. 29.

The stock, with the ticker symbol NVDA, initially traded at $12 per share, through its Initial Public Offering on Jan. 22, 1999.

The strong Nvidia report boosted after-hours trading of tech firms Meta, Microsoft, Amazon and Google.

“This answers a lot of questions about the state of the AI revolution, and the verdict is simple: it is nowhere near its peak, neither from the market-demand nor the production-supply-chain sides for the foreseeable future,” Thomas Monteiro, senior analyst at Investing.com, said in emailed commentary following the report.

In September, Nvidia announced a $100 billion investment in OpenAI in exchange for chip purchases.

On Monday, Anthropic committed to buying $30 billion in computing capacity from Microsoft Azure in exchange for an investment in the AI lab from both tech giants.

Nvidia announced a collaboration with Intel to jointly develop multiple generations of custom data center and PC products with NVIDIA NVLink.

Nvidia has reviewed plans to accelerate seven new supercomputers, including with Oracle to build the U.S. Department of Energy’s largest AI supercomputer, Solstice, plus another system, Equinox.

Nvidia said it had $4.3 billion in gaming revenue, which is a 30% boost from one year ago.

Despite the boom, CEO of one of the world’s largest independent financial advisory organizations warnsthere is a “real risk” because of complacency.

“Exceptional results don’t remove the need for discipline,” Nigel Green of deVere Group in Britain said in an email to UPI. “The AI ecosystem is growing fast, but fast growth doesn’t protect anyone from the consequences of over-extension.”

He said the path from deployment to real commercial returns “remains untested” in many industries.

“Investors must examine whether business models can convert this scale of capital investment into sustained earnings,” he said. “Complacency could be a real risk.”

Analysts expect AI chip demand to remain strong.

Nvidia has forecast fourth-quarter revenue above Wall Street estimates and is betting on booming demand for its AI chips from cloud providers even as widespread concerns of an artificial intelligence bubble grow stronger.

The world’s most valuable company expects fourth-quarter sales of $65bn, plus or minus 2 percent, compared with analysts’ average estimate of $61.66bn, according to data compiled by LSEG.

The results from the AI chip leader mark a defining moment for Wall Street as global markets look to the chip designer to determine whether investing billions of dollars in AI infrastructure expansion has resulted in towering valuations that potentially outpace fundamentals.

“The AI ecosystem is scaling fast with more new foundation model makers, more AI start-ups across more industries and in more countries. AI is going everywhere, doing everything, all at once,” Nvidia CEO Jensen Huang said in a statement.

Before the results, doubts had pushed Nvidia shares down nearly 8 percent in November after a 1,200 percent surge in the past three years.

Sales in the data-centre segment, which accounts for a majority of Nvidia’s revenue, grew to $51.2bn in the quarter that ended on October 26. Analysts had expected sales of $48.62bn, according to LSEG data.

Warning signs

But some analysts noted that factors beyond Nvidia’s control could impede its growth.

“While GPU [graphics processing unit] demand continues to be massive, investors are increasingly focused on whether hyperscalers can actually put this capacity to use fast enough,” said Jacob Bourne, an analyst with eMarketer. “The question is whether physical bottlenecks in power, land and grid access will cap how quickly this demand translates into revenue growth through 2026 and beyond.”

Nvidia’s business also became increasingly concentrated in its fiscal third quarter with four customers accounting for 61 percent of sales. At the same time, it sharply ramped up how much money it spends renting back its own chips from its cloud customers, who otherwise cannot rent them out, with those contracts totalling $26bn – more than double their $12.6bn in the previous quarter.

Still, analysts and investors widely expected the underlying demand for AI chips, which has powered Nvidia results since ChatGPT’s launch in late 2022, to remain strong.

Nvidia CEO Jensen Huang said last month that the company has $500bn in bookings for its advanced chips through 2026.

Big Tech, among Nvidia’s largest customers, has doubled down on spending to expand AI data centres and snatch the most advanced, pricey chips as it commits to multibillion-dollar, multigigawatt build-outs.

Microsoft last month reported a record capital expenditure of nearly $35bn for its fiscal first quarter  with roughly half of it spent primarily on chips.

Nvidia expects an adjusted gross margin of 75 percent, plus or minus 50 basis points in the fourth quarter, compared with market expectation of 74.5 percent.

Lukewarm performances at the box office from the likes of “The Fantastic Four: First Steps,” “The Roses” and “Freakier Friday” dented Walt Disney Co.’s entertainment business for its fiscal fourth quarter, the company reported Thursday.

The Burbank media and entertainment company reported $10.2 billion in revenue for its entertainment segment for the three-month period that ended Sept. 27, down 6% compared with the same quarter a year earlier. Entertainment operating income for the fourth quarter totaled $691 million, down 35% compared with last year.

The softer box office showing during the fourth quarter was being compared with the strong performance of the irreverent superhero flick “Deadpool & Wolverine” in the year-earlier period, as well as the tail end of the theatrical window for the animated juggernaut “Inside Out 2,” each of which would go on to gross more than $1 billion globally.

For the full year, however, Disney’s entertainment segment — which includes movies, TV, Disney+ and Hulu — posted revenue of $42.5 billion, up 3% compared with fiscal year 2024. Operating income totaled $4.7 billion, an increase of 19%.

Though the company saw a 16% decline in revenue for its linear networks in the fourth quarter due to lower ad dollars and viewership, Disney did see an increase for its streaming services. The company reported fourth-quarter streaming revenue of $6.2 billion, an 8% jump compared with the previous year, and operating income of $352 million, up 39%.

“This was another year of great progress as we strengthened the company by leveraging the value of our creative and brand assets and continued to make meaningful progress in our direct-to-consumer businesses,” Disney Chief Executive Bob Iger said in a statement. “I’m pleased with our many achievements this fiscal year to position Disney for the future.”

Disney’s fourth-quarter revenue totaled $22.5 billion, about flat compared with the previous year. That put the company’s year-end revenue at $94.4 billion, up 3%.

Earnings, excluding certain items, for the fourth quarter totaled 73 cents per share, up from 25 cents a year earlier. For the full year, earnings per share was $6.85, up from $2.72. The company’s income before taxes in the fourth quarter was $2 billion, up from $948 million last year; for the full year, it was up 59% to $12 billion.

Disney’s experiences segment, which includes its theme parks, cruise line and Aulani resort and spa in Hawaii, was a bright spot for the fourth quarter. The company reported revenue of $8.8 billion, an increase of 6% from the previous year’s fourth quarter, with operating income rising 13% to $1.9 billion.

Operating income for domestic parks and experiences for the quarter was up 9% to $920 million, which Disney attributed to growth at its cruise line. Disney also got a boost from its international parks and experiences segment, largely due to an increase in attendance and spending at its Disneyland Paris resort.

For the full fiscal year, Disney’s experiences business reported revenue of $36.2 billion, a 6% bump, with operating income increasing 8% to nearly $10 billion.

Disney’s sports business, which includes ESPN, reported quarterly revenue of nearly $4 billion, up 2%, with operating income decreasing 2% to $911 million. The company said the decline in operating income was due to higher marketing costs associated with the August launch of the new ESPN direct-to-consumer service and increases in programming and production costs.

The sports business closed out the year with revenue of $17.6 billion, roughly flat compared with the previous fiscal year, and a 20% jump in operating income to $2.9 billion.

Warner Bros. Discovery reported a $148 million loss in the third quarter, hitting a sour note as the company began fielding interest from would-be buyers as Hollywood braces for a transforming deal.

Earnings for the entertainment company that includes HBO, CNN and the Warner Bros. film and TV studios fell short of analyst expectations. A year ago, the company reported profit of $135 million for the third quarter.

Revenue of $9.05 billion declined 6% from the year-ago period. The company swung to a loss of 6 cents a share, compared to last year’s earnings of 5 cents a share.

Still, Chief Executive David Zaslav spent much of Thursday’s call with analysts touting his company’s underlying strengths — while avoided giving details about the company’s sale.

“It’s fair to say that we have an active process underway,” Zaslav said.

Warner Bros. Discovery on Thursday reiterated it is forging ahead with previously announced plans to split into two separate entities by next spring. However, the Warner board acknowledged last month that it was also entertaining offers for the entire company — or its parts — after David Ellison’s Paramount expressed its interest with formal bids.

Paramount has made three offers, including a $58 billion in cash and stock for all of Warner Bros. Discovery. That bid would pay Warner stockholders $23.50 a share.

The Ellison family appears determined to win one of Hollywood’s most storied entertainment companies to pair with Paramount, which the Ellisons and RedBird Capital Partners acquired in August.

But Warner Bros. Discovery’s board, including Zaslav, voted unanimously to reject Paramount’s offers and instead opened the auction to other bidders, which is expected to lead to the firm changing hands for the third time in a decade.

Board members are betting the company, which has shown flickers of a turnaround, is worth more than the offers on the table. Despite its rocky third-quarter results, Warner’s stock held its ground in early morning trading at around $22.60 a share.

“Overall we are very bullish,” Zaslav said of the company’s business prospects.

“When you look at our films like ‘Superman,’ ‘Weapons’ and ‘One Battle After Another,’ the global reach of HBO Max and the diversity of our network’s offerings, we’ve managed to bring the best, most treasured traditions of Warner Bros. forward into a new era of entertainment and [a] new media landscape,” he said.

But the company’s results underscored its business challenges.

The studio witnessed a major decline in advertising revenue in the third quarter, reporting $1.41 billion, down 16% from the previous year, which executives attributed to declines in the audience for its domestic linear channels, including CNN, TNT and TLC.

Distribution revenue also took a hit, as the company reported sales of $4.7 billion, a decrease of 4% compared to last year.

Studio revenue increased 24% to $3.3 billion, powered by the success of DC Studios’ “Superman,” horror flick “Weapons” and the latest installment of “The Conjuring.” But even those box office wins couldn’t totally offset shortfalls in other areas of its content business.

Last year, the company was able to sub-license its rights to broadcast the Olympics in Europe, which pushed content revenue to $2.72 billion. But this year, revenue was down 3% to $2.65 billion.

Burbank-based Warner Bros. has had a string of success in theaters, with nine films opening at the top spot globally at the box office. The studio recently surpassed $4 billion in worldwide box office revenue, making it the first studio to do so this year. Warner Bros. last achieved that milestone in 2019.

Zaslav would like to continue with Warner’s break-up plans, which were announced last June.

The move would allow him to stay on to manage a smaller Hollywood-focused entity made up of the Warner Bros. studios, HBO, streaming service HBO Max and the company’s vast library, which includes Harry Potter movies and award-winning television shows such as “The Pitt.”

The company’s large portfolio of cable channels, including HGTV, Food Network and Cartoon Network, would become Discovery Global and operate independently.

Beyond Paramount, Philadelphia-based Comcast, Netflix and Amazon have expressed interest in considering buying parts of the company.

The company said its third quarter loss of $148 million was the result of a $1.3 billion expense, including restructuring costs.

Netflix on Wednesday touted a surge in popularity for its low-cost streaming plan with ads, as it looks to tap into the lucrative the world of brands.

The streaming giant said it now has more than 190 million monthly active viewers watching ads through a plan that costs $7.99 a month. The lowest cost ad-free plan costs $17.99 a month.

In May, Netflix said it had 94 million monthly active users watching ads through the cheaper plan. That translated to roughly 170 million monthly active viewers, the company said at the time.

However, the Los Gatos, Calif.-based company is now using a different methodology to measure its audience watching ads, making exact comparison’s difficult.

Netflix now defines monthly active viewers as customers who watched at least 1 minute of ads on Netflix per month. It then multiplies that by the estimated average number of people in a household. Previously, Netflix had measured monthly active users based on the number of Netflix profiles watching content with ads.

The streamer said its previous measurement didn’t illustrate all the people who were in the room watching.

“Our move to viewers means we can give a more comprehensive count of how many people are actually on the couch, enjoying our can’t-miss series, films, games and live events with friends and family,”wrote Amy Reinhard, Netflix’s president of advertising in a post on the streamer’s website on Wednesday.

On Wednesday, Netflix executives said the growth in ad viewers was in line with their expectations.

“We are very satisfied with where we are at,” Reinhard, said in a press briefing. “We think there is a lot of opportunity to grow on this plan around the world, and we’re going to continue to make sure that we are offering our customers a great experience and a great buying experience on the advertising side.”

Netflix began its foray into ad-supported streaming in 2022, after it received pressure from investors to diversify how it makes revenue. Previously, Netflix mainly made money through subscriptions and for many years had been ad-adverse.

The company said last month it was on track to more than double its ad revenue in 2025, but did not cite specific figures. Netflix Co-CEO Greg Peters said in an earnings presentation in October that the ad revenue is still small relative to the size of the company’s subscription revenues, but advertisers are excited about Netflix’s growing scale.

“We see plenty of room for growth ahead,” Peters said.

On Wednesday, Netflix said it is expanding its options for advertisers, including demographic targeting in areas such as education, marital status and household income.

Netflix also said it has partnered with brands including brewing company Peroni Nastro Azzurro in ads for its romantic comedy series “Emily in Paris,” and tested dynamic ad insertion with programs including WWE Raw this quarter and will offer that feature in the U.S. and other countries for NFL Christmas Gameday.

Many streamers have been increasing the cost of their subscriptions in order to become more profitable. Earlier this year Netflix raised the prices on plans.