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NVIDIA Q3 2023 Revenue Soars 83% to $11.98B, Reinforcing Data-Center Dominance

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  Published in Stocks and Investing on Friday, November 21st 2025 at 9:13 GMT by Seeking Alpha

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NVIDIA’s Q3 Performance: Why It’s Now the Second‑Cheapest Stock in the “MAG 7”

In a market that’s been wrestling with uncertainty—from high‑interest rates to global supply‑chain headaches—NVIDIA Corp. (NVDA) continues to generate headlines not just for its technology leadership but for its remarkable financial performance. The company’s Q3 2023 earnings release (July 25 2023) revealed a company that is still on an “unprecedented” revenue run, but one that appears to be more affordable than many of its peers. As of the close of the Q3 trading session, NVDA ranks as the second‑cheapest stock in the Seeking Alpha “MAG 7” list of the most undervalued tech names—a striking development for a company that is usually perceived as a growth premium play.

1. Q3 2023: Numbers That Outpace the Narrative

• Revenue: NVDA’s total revenue exploded by a staggering 83 % YoY to almost $12 bn, reflecting the company’s relentless drive across all segments. The data‑center segment was the clear star, posting a 41 % jump and generating $4.68 bn in sales—an outperformance that reflects continued demand for AI compute and GPU‑accelerated workloads in cloud, enterprise, and research markets.

• Gaming: Despite a slightly muted growth rate of 17 %, the gaming business remains a core pillar. NVDA sold 10.4 million GeForce RTX GPUs in Q3, representing a 7 % YoY volume increase. Gaming continues to be a major driver of revenue for the company, with the new RTX 4090 and RTX 4080 launches boosting sales volumes.

• Professional Visualization & Automotive: Both of these segments recorded double‑digit growth, underscoring the breadth of NVIDIA’s market reach beyond the data‑center arena.

• Profitability: Diluted EPS jumped 75 % YoY to $5.58, a 12 % increase above the consensus estimate. Operating margin expanded from 26 % to 28 %, reflecting improved cost discipline and higher gross‑margin contribution from data‑center revenues.

2. Guidance & Forward‑Looking Outlook

NVDA projected Q4 revenue to fall between $10.3 bn and $10.6 bn, a 1–2 % YoY decline, but with a 2–3 % YoY increase in EPS. Management emphasized that “the upcoming period will feature a seasonal dip in gaming demand, but the data‑center segment will continue to offset the slowdown.” The guidance aligns with the broader market expectation that Q4 will be a “seasonal trough” for gaming but a “resilient” period for AI‑driven workloads.

Analysts also note that NVDA’s cash‑flow generation is exceptional. The company returned $4.4 bn to shareholders through dividends and share buybacks in Q3, while adding $1.2 bn in free cash flow—a strong indicator of operational resilience even amid macro‑economic headwinds.

3. The “Cheap” Story: Valuation Metrics in Context

One of the most intriguing aspects of the Q3 release is the company’s valuation relative to its peers:

• Price‑to‑Earnings (P/E): NVDA trades at a 22.3x P/E—down from 27.8x a year ago—while many growth tech stocks have been priced beyond 30x. The drop is largely due to a 19 % increase in EPS, and to a moderate shift in market sentiment that has moved the focus to companies with higher profit‑margin stability.

• EV/EBITDA: NVDA’s EV/EBITDA sits at 35.8x, a 4x improvement from 2019. This metric underscores the company’s solid earnings power and capital structure discipline.

• Price‑to‑Sales (P/S): At 10.5x, NVDA remains the most expensive within the “MAG 7” group, but relative to its revenue growth rate (83 % YoY) and the industry’s long‑term CAGR, the ratio is considerably more defensible than it appears.

In the “MAG 7” list (which ranks the 7 most undervalued tech stocks based on a composite of valuation, growth, and risk), NVDA is positioned as the second‑cheapest. The top spot belongs to AMD, but NVDA’s higher cash‑flow profile and superior gross margin make it a compelling “value‑growth” hybrid. In other words, the company may still be “cheap” for a premium‑growth brand.

4. Macro‑Economic Context and Risk Assessment

Interest Rate Sensitivity: NVDA’s business model is less sensitive to short‑term interest rate hikes because of its high‑margin, recurring revenue streams. Nevertheless, the company’s capital expenditures (CapEx) and future data‑center expansion plans are partially financed through debt, which could be impacted by tightening rates.

Supply‑Chain Constraints: The semiconductor industry remains subject to bottlenecks in advanced lithography and memory production. NVDA’s robust cash‑position mitigates immediate risk, but longer‑term supply constraints could dampen growth if the company cannot keep up with demand.

Competitive Landscape: AMD has been steadily eroding market share in CPU and GPU segments, while Intel’s new generation of GPUs may pose a threat. Meanwhile, emerging AI‑accelerator startups and cloud‑provider‑specific chips could disrupt the data‑center ecosystem.

Regulatory Pressure: International trade restrictions, especially between the U.S. and China, could affect NVDA’s supply chain and sales. The company has diversified its manufacturing footprint to reduce exposure.

5. Bottom‑Line Takeaway

NVIDIA’s Q3 2023 performance underscores its continued dominance across multiple high‑growth segments, from gaming to AI‑accelerated data centers. The company’s revenue and earnings outpace the consensus, and its forward guidance suggests that the upcoming quarter will remain resilient. Importantly, the valuation story—particularly the 22.3x P/E and 35.8x EV/EBITDA—indicates that NVDA may indeed be “cheaper” than it appears for a company that delivers double‑digit growth and high cash‑flow generation.

For investors who are accustomed to paying premium valuations for growth tech, NVIDIA presents a compelling blend of high performance and relative affordability. Its placement as the second‑cheapest stock in the Seeking Alpha “MAG 7” list reflects a market shift toward companies that combine “growth” with “value.” Whether that trend continues will depend on how well NVIDIA can sustain its data‑center dominance, navigate supply‑chain challenges, and keep its margin profile healthy in an increasingly competitive landscape.

In short, the Q3 data reaffirms that NVIDIA remains a strong bet for investors seeking both upside potential and a more reasonable valuation relative to its peers.