Ai momentum meets ai skepticism after Nvidia beats Q4 and issues stronger Q1 outlook
Nvidia reported blockbuster fourth-quarter results and a first-quarter outlook that topped Wall Street estimates, but the stock dropped amid wider anxiety about the ai trade. The company’s figures, product launches and a renewed multi‑year deal with a major customer are now shaping investor conversations ahead of its GTC 2026 event.
Ai-driven data center surge and the role of hyperscalers
Nvidia said Data Center revenue drove the vast majority of its quarterly growth, bringing in $62. 3 billion for the period. The company breaks down Data Center into compute, graphics chips and CPUs, and networking; compute revenue grew 58% year over year, while networking climbed 263% to $11 billion.
CFO Colette Kress said hyperscalers were a major contributor. "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. Much of the broader build‑out this year is expected to come from hyperscalers such as Amazon, Google, Meta and Microsoft, which plan to spend a collective $650 billion on AI capital expenditures in 2026 alone.
Fourth quarter and fiscal 2026 financials
For the quarter ended January 25, 2026, Nvidia reported revenue of $68. 1 billion, up 20% from the previous quarter and up 73% from a year earlier. 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%; for fiscal 2026, GAAP and non‑GAAP gross margins were 71. 1% and 71. 3%.
On earnings, the company reported GAAP earnings per diluted share of $1. 76 and non‑GAAP earnings per diluted share of $1. 62 for the quarter. For fiscal 2026, GAAP and non‑GAAP earnings per diluted share were $4. 90 and $4. 77, respectively. During fiscal 2026 NVIDIA returned $41. 1 billion to shareholders in the form of shares repurchased and cash dividends, and it had $58. 5 billion remaining under its share repurchase authorization at the end of the fourth quarter.
Guidance, market reaction and stock comparisons
The company offered first‑quarter guidance between $76. 44 billion and $79. 56 billion, above Wall Street’s estimates of $72. 8 billion. Still, Nvidia stock fell more than 4% on Thursday as investors weighed the results against broader market worries about the ai trade.
Through Wednesday afternoon, Nvidia stock was up just over 5% since the start of the year. By contrast, Advanced Micro Devices was down roughly 1%, Broadcom was off about 3%, and Intel was up almost 27% year to date. Gene Munster, managing partner at Deepwater Asset Management, framed the debate around longer‑term growth: "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. "
Product roadmap: Vera Rubin, Grace and the Meta expansion
The results follow Nvidia’s launch of its latest AI superchip, Vera Rubin, at the annual CES technology conference in Las Vegas in January. The company also recently expanded an agreement with Meta to include a multiyear deal for both Blackwell and Rubin AI processors and the first major standalone deployment of Grace CPU servers. Nvidia is set to host its GTC 2026 event in San Jose, Calif., in a few weeks, where it is expected to make a number of major product announcements.
A recent report said Nvidia could launch its own CPU for laptops in the coming months, a move that would aim to boost gaming revenue and compete directly with Intel, AMD and Qualcomm.
Dividends, non‑GAAP changes, investor access and outlook items
Nvidia said it will pay a quarterly cash dividend of $0. 01 per share on April 1, 2026, to shareholders of record on March 11, 2026. Beginning in the first quarter of fiscal 2027, the company will include stock‑based compensation expense in its non‑GAAP financial measures; Nvidia described stock‑based compensation as a foundational component of its compensation program to attract and retain world‑class talent.
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. Nvidia said its outlook for the first quarter of fiscal 2027 is as follows: unclear in the provided context.
The company uses a set of non‑GAAP measures including non‑GAAP gross profit, non‑GAAP gross margin, non‑GAAP operating expenses, non‑GAAP operating income, non‑GAAP other income (expense), net, non‑GAAP net income, non‑GAAP earnings per diluted share and free cash flow to supplement its GAAP results. Nvidia has shown reconciliations of GAAP to non‑GAAP measures; those reconciliations for fiscal years 2025 and 2026 adjust the related GAAP financial measures to exclude stock‑based compensation expense, acquisition‑related and other costs, and other gains/losses—unclear in the provided context.
Jensen Huang, founder and CEO, said the agentic AI inflection point has arrived and highlighted Grace Blackwell with NVLink and Vera Rubin in positioning Nvidia for inference and broader enterprise adoption of agents: "Computing demand is growing exponentially — the agentic AI inflection point has arrived. Grace Blackwell with NVLink is the king of inference today — delivering an order‑of‑magnitude lower cost per token — and Vera Rubin will extend that leadership even further. Enterprise adoption of agents is skyrocketing. Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth. "
Nvidia will conduct a conference call with analysts and investors to discuss fourth‑quarter and fiscal 2026 financial results and current financial prospects today at 2 p. m. Pacific time (5 p. m. Eastern time). A live, listen‑only webcast will be accessible on Nvidia’s investor relations website; the webcast will be recorded and available for replay until Nvidia’s conference call to discuss its financial results for its first quarter of fiscal 2027. CFO commentary by Colette Kress is available online.
