Woods, a 14-time major champion, sizzled early for the third consecutive round but fizzled late in firing a two-under-par 70 at his comeback event, the Hero World Challenge hosted by his charity foundation.
"I'm just not quite there, but it's coming. The great thing is I'm building and each day I've gotten a little bit stronger," said Woods, who admits tiring on late holes.
"I'm definitely not as fresh as I would like to be. No matter how much you work out it's very different than being in playing shape. There are all these different things you can't simulate at home."
Woods, who has not won a major since the 2008 US Open, was asked after his round about trying to catch Nicklaus even though no player has won four majors after turning 41, which Woods will do later this month.
"I wouldn't be here doing this if I didn't feel like I could play at the highest level," Woods said. "I have too much pride."
Only four players have won multiple majors after turning 41 -- Old Tom Morris with three 1860s British Opens and Harry Vardon, Julius Boros and Woods pal Mark O'Meara with two each.
Woods stood on eight-under 208, 11 strokes behind leader Hideki Matsuyama of Japan after 54 holes at the 18-man invitational.
"For three straight days, I've gotten off to great starts. For two of those days, I haven't been able to keep it going," Woods said. "I would like to get another solid round."
Woods birdied four of the first five holes but it was no day at the beach for the former world number one, who spent considerable time in Bahamas sand waste areas after missing the last five fairways at Albany Golf Club, a 7,302-yard Ernie Els-designed layout.
"Probably couldn't get off to a better start than I did," Woods said. "Generally when I come back from layoffs, that's the most concerning part of the game, but I've been able to build a significant amount of positive shots and go under par early."
Woods took a bogey at the par-5 sixth but answered with birdies at seven and the par-5 11th but stumbled with bogeys at 13 and 14. A 30-foot birdie putt at the fairway-less par-3 17th provided a boost but he found sand and water at 18 for a closing double bogey.
"I didn't hit the ball that poorly today but hit bad putts in the middle part of the round," Woods said.
Woods said he no expectations for the week because, "I didn't know what I was going to feel like after each round," but added, "I've finally been able to switch into a competitive mode again."
Woods again flashed moments of his finest shotmaking to excite those seeking signs he can recapture the form that made him a dominating superstar.
"Great to have you back Tiger - Special!" US President-elect Donald Trump tweeted before the round began.
Until this week, Woods had not played competitively since August 2015, when he shared 10th at the Wyndham Championship.
Woods closed with double bogeys on two of the last three holes Thursday to shoot 73 in ending his career-longest 466-day layoff but recovered Friday with a bogey-free 65.
It was his lowest round relative to par since the 2013 World Golf Championships Bridgestone Invitational, the most recent of his 79 career victories.
Woods, three shy of Sam Snead's all-time PGA Tour win mark, plays Sunday's final round alongside South African Louis Oosthuizen.
Strong tee shots and irons set up short birdie putts on the first three holes for Woods, who sank a tense six-foot par putt at four after missing the green with his approach, then blasted out of a bunker at the par-3 fifth and watched the ball roll into the cup for birdie.