The Price of Perfection
Wall Street has a cruel way of rewarding record-breaking success with a sell-off. On this Wednesday, November 26, 2025, Nvidia (NVDA) shares are trading at $180.26, a far cry from the $200 heights seen just weeks ago. The irony is thick. Only seven days ago, Jensen Huang stood before the world to announce a staggering $57.0 billion in quarterly revenue—a 62% jump from last year. Yet, the stock has slipped nearly 13% this month. In the high-stakes world of semiconductor dominance, meeting expectations is no longer enough. You have to transcend them, or the market will find a reason to bleed.
The Blackwell Bottleneck and the Heat Problem
The money is flowing, but the pipes are straining. While Huang claims Blackwell sales are “off the charts,” investigative reports into the supply chain suggest a different reality. The transition to the GB200 NVL72 racks has been plagued by thermal management issues—chips generated so much heat that data center cooling systems couldn’t keep up. This forced a late-stage redesign that pushed back the massive volume shipments originally slated for earlier this fall.
Investors are tracking the capital expenditures of the “Hyperscalers” like Microsoft and Meta. These companies are spending billions, but the return on that investment (ROI) is under a microscope. If the hardware can’t be deployed because of cooling or power grid constraints, the narrative shifts from “infinite demand” to “infrastructure indigestion.” This is the risk vs. reward arc: Nvidia is selling every chip it can make, but it is reaching the physical limits of how fast it can actually deliver them.
The Google Threat and the TPU Moat
The most significant crack in Nvidia’s armor appeared earlier this month with the release of Gemini 3. Unlike previous frontier models, Google’s latest AI powerhouse was trained almost exclusively on its internal Tensor Processing Units (TPUs), skipping the “Nvidia Tax” entirely. This move confirms what bears have feared: the world’s largest tech companies are successfully building their own silicon to bypass Nvidia’s 73.6% gross margins.
When a customer like Google, which has historically been one of Nvidia’s largest spenders, proves it can achieve state-of-the-art performance on its own chips, the “unstoppable moat” begins to look like a very expensive choice rather than a necessity. This is the primary driver behind the current price correction. The market is pricing in a future where Nvidia is a peer, not a monopoly.
The Geopolitical Tariff and the China Pivot
Washington is also complicating the balance sheet. Per Reuters reporting on recent trade policy shifts, the Trump administration has effectively lifted the ban on H200 shipments to China but replaced it with a mandatory 25% “AI Export Fee.” While this opens up a market of 2 million units for the 2026 calendar year, it fundamentally changes the profitability of the China business.
Nvidia is currently sitting on 700,000 H200 units in inventory. Moving these into China before the Lunar New Year in February is critical for hitting the Q4 revenue target of $65 billion. If Beijing retaliates or delays the import approvals for these chips, Nvidia’s largest growth lever for the first half of 2026 could be paralyzed.
The Hard Data
To understand the disconnect between the stock price and the business, we must look at the Q3 Fiscal 2026 results released in the latest SEC Form 8-K filing. The numbers show a company at its zenith, yet facing increasing operational costs.
| Metric | Q3 Fiscal 2026 (Actual) | Q3 Fiscal 2025 (Year Ago) | Growth (%) |
|---|---|---|---|
| Total Revenue | $57,006 Million | $35,082 Million | +62% |
| Data Center Revenue | $51,200 Million | $30,800 Million | +66% |
| Non-GAAP Gross Margin | 73.6% | 75.0% | -1.4% |
| Net Income | $31,910 Million | $19,309 Million | +65% |
| EPS (Diluted) | $1.30 | $0.78 | +67% |
Notice the gross margin. It has ticked down from 75% to 73.6%. While this seems minor, it indicates that the complexity of Blackwell—with its advanced liquid cooling and NVLink interconnects—is more expensive to produce than the previous Hopper generation. Efficiency is the new battleground.
Following the Money into 2026
The immediate risk isn’t a lack of demand; it’s the logistics of the “Rubin” architecture ramp-up scheduled for the second half of 2026. This next-generation platform is designed to be a multi-chip, rack-scale system from day one, aiming to fix the integration headaches seen with Blackwell. For now, the smart money is watching the $159.97 support level. If the stock settles the week below that mark, it signals a deeper structural rotation away from AI hardware and into the software layer. The next major milestone to watch is the February 25, 2026, earnings call, where Nvidia must prove that the 25% China tariff hasn’t killed its most lucrative expansion path.
