It has become a nearly predictable market ritual. Nvidia delivers yet another record-breaking quarter, posting $68.1 billion in revenue—a 20% increase from the previous quarter and a staggering 73% jump year-over-year. Yet, Wall Street’s reaction has been far from euphoric. In after-hours trading, after an initial spike, the stock settled into a modest 1.5% gain.
The “wow factor” is missing once again. Many investors concluded that the earnings call offered nothing that significantly raised expectations for the coming quarters. Simultaneously, nervousness is growing around the valuations of AI-related companies. Recently, the market has demanded nothing short of perfection from Nvidia—a standard that is increasingly difficult, if not impossible, to maintain.
A Breakdown of the Numbers
Nvidia presented stellar results for the fourth quarter of fiscal year 2026 (ended January 2026). The company beat expectations across almost every key metric:
| Metric | Reported | Market Consensus |
| Total Revenue | $68.13 billion | $65.9 billion |
| Data Center Revenue | $62.3 billion | $60.4 billion |
| Adjusted EPS | $1.62 | $1.53 |
| Net Profit | $43 billion | N/A |
To put this in perspective, Nvidia’s net profit in this single quarter ($43 billion) is higher than its total annual revenue just three years ago in 2023. At this scale, maintaining such growth momentum is extraordinary. Furthermore, a gross margin of 75.2% exceeded forecasts, dispelling fears about profitability as the Blackwell platform matures.
Aggressive Forecasts and the “China Factor”
The company followed up its results with bullish guidance. Nvidia expects revenue for the first quarter of fiscal year 2027 to reach $78 billion at the midpoint, well above the $72.78 billion expected by Wall Street. Notably, this forecast assumes zero data center revenue from China. Any potential easing of export restrictions would represent a “pure bonus” that has not yet been priced in by the market.
The $650 Billion AI Wave
The “Big Four”—Microsoft, Amazon, Google, and Meta—have announced plans to spend a combined $650 billion on AI infrastructure in 2026. Nvidia sits at the absolute epicenter of this spending wave.
Evidence of this shift is clear in the networking segment, which saw revenue grow 263% year-over-year to a record $11 billion. Building AI at this scale requires more than just chips; it involves a total overhaul of data center architecture.
To meet this demand, Nvidia has secured $95.2 billion in inventory and purchase obligations to support its production capacity—nearly double the amount from a year ago. When the world’s largest tech companies spend at this rate, the supplier must be ready to deliver.
The Skepticism: Why No Euphoria?
If the results were so good, why did the stock barely move?
- The Perfection Trap: Investors are so accustomed to Nvidia beating expectations that “great” has become the new “average.”
- Revenue Concentration: Some investors are concerned that 36% of revenue comes from just two large, unnamed customers. This raises questions about revenue concentration and the sustainability of their spending.
- Gaming Weakness: The gaming segment remains a minor weak point, with supply constraints expected in the first quarter. However, with data centers now accounting for 91% of the business, gaming no longer carries the weight it once did.
Final Outlook
Nvidia has delivered another flawless quarter, but the market’s moderate reaction highlights a clear asymmetry in perception. So far, Nvidia has not disappointed, and the outlook for the coming months remains promising.
While it is likely we will see a similar scenario play out in three months, the high valuations of tech giants remain a critical factor for investors to monitor when constructing their portfolios. Nvidia did its part; now, the market is waiting to see if the rest of the economy can keep up.
Source: CEO.com.pl
