​​​​Nvidia Q3 Earnings Preview: Can AI Growth Outweigh The Jensen Huang Scandal?​​​

(MENAFN- DailyFX (IG)) Gross margins are becoming more important

​One potential weakness is profitability. Nvidia's Q2 gross margin was 75%, but management expects Q3 gross margin of around 74%, plus or minus 50 basis points.

​Memory shortages and rising component costs are becoming a greater constraint as Nvidia scales production. Management has warned that gross margins could fall towards 71–72% in Q4 before recovering as pricing and product mix improve.

​Investors will therefore be watching whether Nvidia can continue growing revenue at an extraordinary rate without sacrificing too much profitability. A revenue beat accompanied by weaker-than-expected margins could receive a more muted market response than in previous quarters.

​For those tracking the broader semiconductor sector and the relationship between AI demand and share prices, our trading platform gives you access to Nvidia and thousands of other global markets.

Can the AI spending boom continue?

​Perhaps the biggest question facing Nvidia is not Q3 itself but the outlook beyond it.

​In August, the company surprised investors by forecasting around 70% revenue growth for fiscal 2028, substantially above the roughly 44% growth analysts had previously expected. Nvidia said demand for AI computing was accelerating across hyperscalers, AI labs, enterprises, governments and industrial customers.

​That forecast effectively raised the bar for the entire AI sector. Nvidia's results will therefore be viewed as an important test of whether the enormous capital expenditure programmes being undertaken by Microsoft, Amazon, Alphabet, Meta and other customers can continue generating sufficient returns to justify further spending.

​China remains another uncertainty. Nvidia excluded Chinese data-centre compute revenue from its Q3 guidance, meaning any update on potential H200 sales could provide upside but should not be assumed in the base case.

Jensen Huang: personal scandal becomes corporate risk

​The earnings announcement will also be the first major investor test of Nvidia's leadership following the controversy surrounding Huang.

​On 8 November, Huang acknowledged that he had been unfaithful to his wife and apologised to his family, employees, board and shareholders. Separately, Nvidia's board announced an independent investigation into reports that Huang may have been targeted by a foreign intelligence effort. Nvidia has said it has no reason to believe that national security or company secrets were compromised, while Huang has pledged to cooperate fully with the investigation.

​The issue matters to investors because Huang is unusually central to Nvidia's corporate identity and strategy. He co-founded the company and has become one of the most prominent public faces of the AI revolution. Any threat to his position could therefore introduce a leadership-discount risk that would be difficult to quantify through conventional earnings forecasts.

​There is also a potentially more serious business dimension. Reuters reported on Tuesday that The Information had alleged Huang's relationship with a Chinese businesswoman helped facilitate at least $7.5 billion of Nvidia chip shipments to Chinese firms. These are allegations, not established findings, and Nvidia and the companies named had not immediately commented. The board investigation is therefore particularly important for determining what, if anything, happened and whether there were consequences for Nvidia's controls or regulatory exposure.

Analyst ratings and technical analysis

​Analysts rate Nvidia as a 'buy' even though some, such as Wells Fargo's, reduced their price target to $300. The mean long-term price target nonetheless remains at $322.93, some 81% above the current Nvidia share price (as of 10/11/2026).

​Source: LSEG Data & Analytics

​TipRanks attributes a '7 Neutral' Smart Score to Nvidia but has a 'strong buy' analyst consensus.

​Source: TipRanks

​The Nvidia share price – down 4% year-to-date – has fallen by close to 30% from its 6 October record peak at $243.37 to this week's $170.24 low before recovering. This level was last traded in March and, if slipped through, would put the September 2025 and March 2026 lows at $164.07-to-$164.27 on the cards.

​Nvidia weekly candlestick chart ​Source: TradingView

​For the Nvidia share price to recover, not only does this week's price gap with the Friday 6 November low at $185.22 need to be closed but, more importantly, a rise above the $190.01-to-$197.97 resistance area be seen. It consists of the June-to-July lows and the October 2025 and December 2025-to-February 2026 highs.

​Nvidia daily candlestick chart ​Source: TradingView

​If so, the 200-day simple moving average (SMA) at $204.63 and the October 2025 high at $212.19 may ensue.

What investors will watch

​Nvidia's Q3 results will be judged against four major questions: can revenue meet or exceed the $108 billion guidance; can gross margins remain close to 74%; is demand for Blackwell and Vera Rubin continuing to outstrip supply; and can management maintain its exceptionally bullish longer-term growth outlook?

​The Huang controversy adds a fifth question: can Nvidia reassure investors that its leadership and governance remain strong enough to support the company's next phase of growth?

​A strong earnings beat and another bullish outlook could help investors look beyond the scandal and refocus on Nvidia's extraordinary AI demand. But a weaker revenue outlook, further margin compression or troubling developments from the board investigation could amplify the pressure on a share price that has already suffered a sharp fall.

​For now, the fundamental Nvidia story remains remarkably strong. The risk is that investors are no longer assessing the company solely on its ability to sell AI chips. They are increasingly assessing whether the governance and geopolitical risks surrounding its most important executive can be contained without disrupting the growth story that has made Nvidia the world's most valuable chipmaker.

How to invest in Nvidia shares

​Do your research on Nvidia, the Q3 FY2027 results on 17 November and the key metrics to watch across revenue, margins and the board investigation

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