Ai: Nvidia beats on Q4 expectations and offers better-than-anticipated Q1 outlook
Nvidia beat Wall Street expectations for the fourth quarter and set a first-quarter outlook that topped estimates, even as broader anxiety about the ai trade pushed the stock lower. The company reported record revenue and detailed large data center gains, guidance for fiscal 2027 and significant shareholder returns.
Ai-driven data center surge
Nvidia said Data Center revenue drove the vast majority of growth, bringing in $62. 3 billion for the quarter. The company breaks down that business into compute, graphics chips and CPUs, and networking; compute revenue grew 58% year over year, while networking soared 263% to $11 billion. CFO Colette Kress said 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. " The company noted that hyperscalers including Amazon, Google, Meta and Microsoft plan to spend a collective $650 billion on AI capital expenditures in 2026.
Quarterly and fiscal results
For the fourth quarter ended January 25, 2026, Nvidia reported revenue of $68. 1 billion, up 20% from the previous quarter and up 73% from a year ago. For fiscal 2026, revenue was $215. 9 billion, up 65% from a year ago. For the quarter, GAAP and non-GAAP gross margins were 75. 0% and 75. 2%, respectively; for fiscal 2026 those margins were 71. 1% and 71. 3%, respectively.
Earnings per diluted share for the quarter were $1. 76 on a GAAP basis and $1. 62 on a non-GAAP basis. For fiscal 2026, GAAP and non-GAAP earnings per diluted share were $4. 90 and $4. 77, respectively. Market expectations for the quarter had been lower: Wall Street was anticipating EPS of $1. 53 on revenue of $65. 8 billion. Nvidia also said its non-GAAP measures are intended to supplement GAAP results and that reconciliations adjust GAAP measures to exclude items such as stock-based compensation expense and acquisition-related and other costs; the reconciliations’ full detail is unclear in the provided context.
Shareholder returns and dividend plans
During fiscal 2026, Nvidia returned $41. 1 billion to shareholders through share repurchases and cash dividends. As of the end of the fourth quarter the company had $58. 5 billion remaining under its share repurchase authorization. Nvidia said it will pay a next quarterly cash dividend of $0. 01 per share on April 1, 2026, to shareholders of record on March 11, 2026. The company also said that, beginning in the first quarter of fiscal 2027, it will include stock-based compensation expense in non-GAAP financial measures.
Stock reaction and investor debate
Despite the beat and stronger guidance, Nvidia stock fell more than 4% on Thursday as investors weighed the results against concerns about the broader ai trade. The stock had been up just over 5% since the start of the year as of Wednesday afternoon; by comparison, Advanced Micro Devices was down roughly 1%, Broadcom was off 3% and Intel was up almost 27% year to date.
Gene Munster, managing partner at Deepwater Asset Management, wrote that the disconnect between Nvidia’s announcements and its stock performance comes down to whether investors see the AI buildout as nearing an end or still early. Munster wrote, "The real debate is what growth looks like in 2027 and 2028. " He added, "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. "
Product roadmap and upcoming events
Nvidia’s results come a few weeks before the company is set to host its GTC 2026 event in San Jose, Calif., where it is expected to make major product announcements. The quarter also follows the launch of the company’s latest ai superchip, Vera Rubin, which debuted at the annual CES technology conference in Las Vegas in January.
Management described product momentum and expanded customer agreements. Nvidia expanded its agreement with Meta to include a massive, multiyear deal that will provide both Blackwell and Rubin processors, and it will support the first major standalone deployment of its Grace CPU servers. Outside Data Center, gaming revenue was $3. 7 billion for the quarter versus estimates of $4 billion. Nvidia could launch its own CPU for laptops in the coming months, which would help gaming revenue and place the company in direct competition with Intel, AMD and Qualcomm in the laptop CPU segment.
Conference call and outlook notes
The company scheduled a conference call with analysts and investors to discuss fourth-quarter and fiscal 2026 results at 2 p. m. Pacific time (5 p. m. Eastern time), with a live webcast in listen-only mode available on the company’s investor relations website and the recording available for replay until the company’s call for its first quarter of fiscal 2027. Nvidia said its outlook for the first quarter of fiscal 2027 is provided, but the specific figures are unclear in the provided context. For the full year fiscal 2027, GAAP and non-GAAP tax rates are expected to be between 17. 0% and 19. 0%, excluding any discrete items and material changes to Nvidia’s tax environment.
Company executives framed the quarter around accelerating demand for agentic compute and inference leadership. Jensen Huang, founder and CEO, said the agentic ai inflection point has arrived and cited Grace Blackwell with NVLink as "the king of inference today, " with Vera Rubin extending that leadership; he said enterprise adoption of agents is skyrocketing and customers are racing to invest in AI compute.
That combination of record revenue, outsized Data Center gains, shareholder returns and an aggressive product calendar forms the picture Nvidia laid out even as the market weighed what comes next for the ai trade.
