Nvidia Earnings Beat, Stock Falls on AI Jitters
Nvidia earnings showed record revenue and $78.0B Q1 guidance, but shares slipped as traders questioned AI spending durability and valuations.
KEY TAKEAWAYS
- Reported record Q4 revenue of $68.1 billion, led by $62.3 billion Data Center.
- Guided Q1 FY2027 revenue at $78.0 billion plus or minus 2%, excluding China Data Center compute revenue.
- Shares had declined 3.0% by Feb. 27 amid doubts about AI spending durability and competition.
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Nvidia Corp. (NVDA) reported a record quarter with strong Nvidia earnings and bullish guidance, but shares declined as investors questioned the durability of AI-infrastructure spending amid broader market concerns and rising competition.
Record Quarter and Guidance
The company said in a press release on Feb. 25, 2026, that fourth-quarter revenue reached $68.1 billion, up 73% year-over-year and 20% sequentially, with GAAP diluted earnings per share (EPS) of $1.76. The Data Center segment drove the results, generating a record $62.3 billion in revenue, an $11 billion sequential increase. Nvidia’s guidance for the first quarter of fiscal 2027 calls for $78.0 billion in revenue, plus or minus 2%, excluding any Data Center compute revenue from China. On the earnings call, Chief Executive Jensen Huang said, "The agentic AI inflection point has arrived."
Market Reaction and AI Concerns
Shares initially rose 1.57% in after-hours trading on the earnings day but fell 3.03% by Feb. 27, 2026, as investors weighed concerns about the sustainability of AI spending, valuation sensitivity, and competitive threats from alternative chip suppliers. The S&P 500 declined 0.54% and the Nasdaq Composite dropped 1.18% on Feb. 26 amid AI-related jitters that pressured technology stocks.
Management said visibility extends well into 2027 and expects supply tightness for advanced architectures to persist, signaling continued demand despite constrained capacity. Industry forecasts project the AI chip market at roughly $125 billion in 2026, with Nvidia holding more than 70% of the AI accelerator market. This concentration supports the company’s pricing power but also focuses investor attention on how quickly demand might normalize.
