Wednesday, February 25

Nvidia beats on Q4 expectations and offers better-than-anticipated Q1 outlook


Nvidia (NVDA) reported its fiscal fourth quarter results after the bell on Wednesday, beating analysts’ expectations on the top and bottom lines. The company also offered Q1 guidance between $76.44 billion and $79.56 billion, above Wall Street’s estimates of $72.8 billion.

That outlook doesn’t include any potential revenue out of China.

Nvidia shares were up more than 3% in after-hours trade.

For the quarter, Nvidia saw earnings per share of $1.62 on revenue of $68.1 billion. Wall Street was anticipating EPS of $1.53 on revenue of $65.8 billion, according to Bloomberg analyst consensus estimates. The company reported EPS of $0.89 and revenue of $39.3 billion in the same quarter last year.

Nvidia’s data center drove the vast majority of that growth, bringing in $62.3 billion for the period. That’s better than analysts’ projections of $60.2 billion.

CFO Colette Kress said much of that came from hyperscalers.

“For the fourth quarter, hyperscaler revenue increased and remained our largest customer category at slightly over 50% of Data Center revenue, while growth was led by the rest of our Data Center customers as revenue diversified,” she said in a statement.

Nvidia CEO Jensen Huang speaks during a Nvidia keynote address at CES 2026, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S. January 5, 2026.  REUTERS/Steve Marcus
Nvidia CEO Jensen Huang speaks during a Nvidia keynote address at CES 2026, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S. January 5, 2026. REUTERS/Steve Marcus · REUTERS / Reuters

Nvidia breaks down its data center business into compute, graphics chips and CPUs, and networking. For the quarter the company said compute revenue grew 58% year-over-year, while networking soared 263% to $11 billion

Nvidia’s results come just a few weeks before the company is set to host its GTC 2026 event in San Jose, Calif., where it’s expected to make a number of major product announcements.

It also follows the launch of Nvidia’s latest AI superchip, Vera Rubin, during the annual CES technology conference in Las Vegas in January.

More recently, Nvidia expanded its agreement with Meta to include a massive, multiyear deal that will see the chip company provide the social media giant with both its Blackwell and Rubin AI processors, as well as the first major standalone deployment of its Grace CPU servers.

Despite the momentum, Nvidia stock was up just over 5% since the start of the year as of Wednesday afternoon. Still, that’s better than Advanced Micro Devices (AMD), which is down roughly 1%, and Broadcom’s (AVGO), which is off 3%. Intel (INTC), however, is up almost 27% this year.

Deepwater Asset Management managing partner Gene Munster wrote in a blog post that the disconnect between Nvidia’s recent announcements and its stock performance comes down to whether investors believe the AI trade is nearing an end — or still just getting started.

Read more: Live coverage of corporate earnings

“The real debate is what growth looks like in 2027 and 2028,” Munster wrote. “Ultimately, investors have to decide what inning of the AI buildout we are in, if it’s the fifth inning, 2027 growth should look more modest, and if it is the second inning, which I believe, Nvidia’s growth outlook over the next several years remains robust.”

Much of that build-out this year will continue to come from hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), Meta (META), and Microsoft (MSFT), which plan to spend a collective $650 billion on AI capital expenditures in 2026 alone.

Outside of its data center business, Nvidia reported gaming revenue of $3.7 billion versus estimates of $4 billion.

According to The Verge, Nvidia could launch its own CPU for laptops in the coming months, which would serve as a boost to the company’s gaming revenue.

The chip would stand as a direct competitor to Intel and AMD, as well as Qualcomm (QCOM), which is working to win market share in the segment.

And while Nvidia won’t see the kind of revenue from PC chips as it does from data centers, it would further cement the company’s place among hardcore gamers and those looking for a laptop that can play the occasional title on the go.

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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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