TLDR
- Nvidia revealed they shattered records with Q4 revenues of $39.3 billion, marking a 78% boost compared to the previous year, outperforming forecasts with earnings of $0.89 per share.
- Data center revenues reached an impressive $35.6 billion, nearly doubling year-on-year due to a surge in demand for Blackwell AI chips.
- Despite DeepSeek’s initial impact, leading to a stunning $600 billion dip in market valuation in January, CEO Jensen Huang emphasized the exceptional demand for Blackwell.
- Anticipating the fiscal year 2026, Nvidia projects Q1 revenues to reach $43 billion, with expected gross margins near 71%.
- Nvidia commands an overwhelmingly dominant share in the GPU market, weathering new competitive pressures like those from DeepSeek’s technology.
Nvidia In the fourth quarter, Nvidia reached an unparalleled $39.3 billion in revenue. That's a substantial 78% growth over the last year. The tech giant exceeded Wall Street's forecasts with earnings per share of $0.89, surpassing the consensus of $0.84.
This quarter cements Nvidia's streak of outperforming profit expectations, keeping its stronghold in the competitive AI hardware terrain despite some threats from other players.
Nvidia's stock celebrated a 3.67% boost to $131.28 at market close, climbing another 2.32% to $134.33 in after-hours trading as investors digested the announcement.
The data center sector, Nvidia’s most significant revenue generator, spearheaded growth, achieving a $35.6 billion haul, improving 16% from last quarter and nearly doubling from last year.
CEO Jensen Huang spotlighted remarkable demand for Blackwell AI chips, stating, 'Nvidia is propelling AI computing like never before.'
Huang pointed out that businesses are striving for enhanced AI processing capabilities, fueling extraordinary demand for Blackwell, despite existing market anxiety about growth sustainability.
For the entire fiscal year, Nvidia’s revenues more than doubled, reaching $130.5 billion, with net income soaring by 145% to $72.9 billion, reinforcing its formidable AI market status.
Looking forward, Nvidia anticipates a $43 billion revenue in Q1 FY2026, aligning with Wall Street’s expectations but slightly below some optimistic outlooks.
Projected gross margins stand at 70.6% by GAAP standards and 71.0% by non-GAAP, implying Nvidia hopes to retain about 71 cents profit on each sales dollar after primary expenses.
China’s DeepSeek Model
Amid nervous anticipation, this earnings report was marked as the first since the January spotlight on China’s DeepSeek AI. DeepSeek launched an AI model praised for equaling or surpassing many American counterparts while demanding less computing power. This revelation initially caused Nvidia's shares to drop sharply, wiping out $600 billion in value in just a day, while the tech realm reported a staggering $1 trillion in lost market cap.
However, in the earnings call, Huang countered these fears stating that DeepSeek actually bolstered enthusiasm for Blackwell, given that reasoning models require exponentially more computing power.
'We crafted Blackwell precisely for times like these,' Huang asserted in the call, affirming a rising tide in AI infrastructure expectations across all timeframes.
Some experts remarked that despite rival advances, the crème de la crème of AI models still rely on the scale of Nvidia’s computing capabilities. 'The billions in sales attributed to Blackwell uphold Nvidia’s leadership,' noted eMarketer's Jacob Bourne.
There are analyst insights that point towards measured market reactions due to Nvidia's potential outperforming of Wall Street's optimistic figures.
'Nvidia's latest quarterly sales figures have surpassed their entire annual revenue from just two years ago,' commented Saxo Markets' Jacob Falkencrone, though he added that lofty growth expectations have already been baked into the share price, suggesting it wasn't the blowout some envisioned.
With its commanding 90% grip on the GPU sphere, Nvidia’s valuation has soared to an impressive $3.1 trillion, ranking it among the upper echelon of the globe’s most valuable enterprises.
The earnings announcement came in a climate where broader market indicators had mixed fates. The S&P 500 rose slightly, snapping a four-day decline streak, while the Dow Jones Industrial Average dropped by 0.4%.
Meanwhile, the tech-centric Nasdaq Composite nudged up by 0.3%. Post-market trading saw slight gains in S&P 500 and Nasdaq futures, while Dow Jones futures showed minimal movement.
Huang also shared insights about the upcoming phases of AI progress.
'Beyond the consumer AI and search, we’ve barely scratched the surface with some consumer generative AI,' he noted, adding, 'The next frontier is upon us: enterprise agentic AI, physical AI for robots, and regional sovereign AI development.'
Nvidia stated that the potential impact of Donald Trump’s proposed tariffs on its operations remains ambiguous, maintaining vigilance on policy shifts affecting its global footprint.
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