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Nvidia Reports Record Revenue; Stock Performance and China Outlook Highlight Investor Debate

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Nvidia Surpasses Estimates in Q4 Fiscal 2026, Provides Strong Guidance

Nvidia Corp. announced financial results for its fourth quarter of fiscal year 2026 and provided guidance for the first quarter of fiscal year 2027, exceeding Wall Street estimates on revenue and earnings. The company's stock saw a muted reaction in after-hours trading, prompting discussion among analysts regarding the sustainability of growth and market expectations. The company also confirmed that its financial outlook does not assume revenue from China.

Financial Performance

For the fiscal fourth quarter ending January 25, Nvidia reported:

Revenue: $68.13 billion, a 73% increase year-over-year. This surpassed the Wall Street estimate of approximately $65.7 billion.

Earnings Per Share (EPS): $1.62, exceeding analyst expectations of $1.52.

  • Gross Margin: Reported in line with expectations, within the 73% to 75% range.

For the full fiscal year 2026, Nvidia reported total revenue of $216 billion.

Outlook and Guidance

For the first quarter of fiscal year 2027, Nvidia projected:

Revenue: Between $76.44 billion and $79.56 billion, which is above analysts' estimates of $71 to $72 billion.

  • Gross Margins: Forecasted near 75%.

Nvidia’s next platform, Vera Rubin, is scheduled to ship in the third quarter of the fiscal year. The company expressed confidence in its forecast of $1 trillion in combined revenue from its Blackwell and Rubin platforms from calendar 2025 through 2027.

Market Reaction and Analyst Perspectives

In regular trading on the day of the announcement, Nvidia’s stock (NASDAQ: NVDA) closed at $195.62, a gain of 1.44%. In after-hours trading, the stock initially declined before stabilizing.

Financial analysts offered differing views on the market’s response:

  • Jim Cramer (CNBC) described the after-hours decline as unwarranted, stating it was "a mistake" given the reported performance.

  • Gene Munster (Deepwater Asset Management) suggested the market’s response reflected ongoing concerns about the sustainability of Nvidia’s growth. Munster stated he anticipates Nvidia will continue to perform well and sees further upside, but noted that potential gains may be more limited due to the company’s current market capitalization of $4.75 trillion.

Historical data shows that Nvidia’s stock has declined in the five trading days following 7 of the past 12 quarterly reports. However, over the subsequent six months, the stock has risen 8 out of the past 11 times. The current forward price-to-earnings ratio is approximately 26.

China Revenue Outlook

Nvidia executives stated during their earnings call that their financial outlook does not assume revenue from China, and future shipments to the region remain uncertain.

CFO Colette Kress confirmed that while the U.S. government approved small amounts of H200 products for China-based customers, Nvidia has yet to generate any revenue from these shipments, and it is unclear if further imports will be permitted into China.

Market Context

Nvidia projects global data center capital expenditures could reach $3 trillion to $4 trillion annually by 2030, driven by AI spending. For calendar year 2025, the company estimated global data center spending at approximately $600 billion.

Major hyperscalers, including Microsoft, Amazon, Google, Meta, and Oracle, are projected to collectively spend over $600 billion in 2026 capital expenditures, with a substantial portion allocated to AI infrastructure.

Nvidia’s reported revenue of $216 billion for fiscal year 2026 represents a 36% share of the company’s estimated $600 billion in global data center spending for 2025.