Nvidia Corp (NVDA) reported record-breaking third-quarter revenue and earnings for fiscal 2025, exceeding Wall Street expectations on the back of surging demand for artificial intelligence chips. 

Despite the strong performance, shares dipped more than 2% in after-hours trading, reflecting investor caution over valuation and tempered guidance.

The chipmaker posted revenue of $35.08 billion for the quarter ended October 27, a 94% increase year-on-year and beating analysts’ consensus estimate of $33.28 billion. 

Nvidia’s non-GAAP earnings-per-share came in at $0.81, surpassing consensus estimates of $0.75 EPS. Revenue from the Data Center segment, Nvidia’s key growth driver, reached a record $30.8 billion, up 112% from the same period last year.

Jensen Huang, Nvidia’s founder and CEO, called the quarter a reflection of “AI in full steam” as enterprises adopt Nvidia’s Hopper GPUs and anticipate the launch of its next-generation Blackwell platform.

The tech giant has been riding high this year following an explosion of investor interest in AI-related firms and businesses. That has helped drive the Nasdaq to record heights amid prospects of a return to cheaper borrowing should the U.S. Federal Reserve continue to slash its benchmark rate.

Despite strong results, Nvidia’s stock fell 0.76% during regular trading and dropped another 2.39% in after-hours, closing at $142.40. 

Analysts attributed the decline to profit-taking after Nvidia's year-long rally, along with cautious reactions to the company’s Q4 guidance. 

Nvidia expects revenue of $37.5 billion for the next quarter, representing a 7% sequential increase and aligning with analyst forecasts.

Nvidia’s gaming segment also saw steady growth, reporting $3.3 billion in revenue, up 14% sequentially and 15% year-on-year. However, smaller segments like Automotive and Professional Visualization, while growing, contributed modestly to overall revenue.

While results underscore Nvidia's dominance in the AI and accelerated computing space, concerns over the company’s soaring valuation and supply constraints for its GPUs could weigh on the stock in the short term.

Nvidia will hold a conference call with analysts later Wednesday to provide further insights into its outlook.