Nvidia’s latest quarterly report once again confirmed its position at the center of the global AI infrastructure buildout — but it also revealed a market dynamic investors are increasingly confronting: “great numbers” are no longer enough on their own to trigger outsized stock moves. Below is a detailed breakdown of Nvidia’s Q4 FY2026 results (quarter ended January 25, 2026), the immediate market reaction, and the forward outlook management provided for the business and for NVDA stock.
Key Takeaways From Nvidia’s Q4 FY2026 Results
Nvidia reported record quarterly revenue of $68.1 billion, up 20% sequentially and 73% year over year, driven overwhelmingly by data center demand.
Profitability remained exceptional:
- GAAP gross margin: 75.0% (non-GAAP 75.2%)
- GAAP EPS (diluted): $1.76; non-GAAP EPS: $1.62
- GAAP net income: $42.96 billion, up 94% year over year
For the full fiscal year, Nvidia posted $215.9 billion in revenue (up 65%) and $120.1 billion in GAAP net income.
Data Center Still Dominates: AI Infrastructure Spending Drives the Story
Nvidia’s Data Center segment was the clear engine:
- Data Center revenue: $62.3 billion (up 22% QoQ, 75% YoY)
- Data Center represented over 90% of total quarterly revenue, underscoring how much Nvidia has shifted from its legacy gaming identity to being the “compute backbone” of AI.
A particularly important detail for investors watching concentration risk: Nvidia said hyperscalers were slightly over 50% of Data Center revenue in the quarter, while growth was also “led by the rest” of data center customers as revenue diversified.
Within data center, networking has become a bigger pillar than many casual observers realize:
- Networking revenue: $11.0 billion, up 263% YoY and 34% sequentially, helped by NVLink ramp for GB200/GB300 systems and growth in Ethernet/InfiniBand.
This matters because modern AI systems are increasingly “rack-scale” — and Nvidia is monetizing not only GPUs, but also the interconnect fabric that makes large AI clusters work.
Gaming, Pro Viz, and Automotive: Growth — With Some Constraints
Outside data center:
- Gaming revenue: $3.7 billion, up 47% YoY but down 13% QoQ as channel inventory moderated after strong holiday demand. Management also warned that supply constraints could be a headwind for gaming in Q1 FY2027 and beyond.
- Professional Visualization: $1.3 billion, up 159% YoY and 74% QoQ, reflecting strong demand for Blackwell-based workstation/enterprise visualization workloads.
- Automotive: $604 million, up 6% YoY
The overall message: Nvidia is growing beyond “just hyperscalers,” but the company’s performance is still primarily governed by the pace of AI infrastructure capex.
Outlook: Nvidia Guides to $78 Billion Next Quarter — And Flags China Uncertainty
The most market-moving part of Nvidia earnings is often guidance, and Nvidia delivered a big headline:
- Q1 FY2027 revenue guidance: $78.0 billion ± 2%
Two guidance details stood out:
- No assumed China data center compute revenue.
Nvidia explicitly said its outlook does not assume any Data Center compute revenue from China, reflecting ongoing export-control and policy uncertainty. - Non-GAAP reporting change.
Beginning in Q1 FY2027, Nvidia will include stock-based compensation (SBC) expense in non-GAAP financial measures, which can affect how investors compare “adjusted” profitability versus prior quarters.
Margin and spending guidance:
- Q1 FY2027 GAAP gross margin: 74.9% ± 50 bps (non-GAAP 75.0% ± 50 bps)
- Q1 FY2027 operating expenses: ~$7.7B GAAP and ~$7.5B non-GAAP, inclusive of $1.9B SBC
Market Reaction: Why NVDA Didn’t “Rip Higher” on Blowout Numbers
Despite the scale of the beat and the strong forward guide, early trading action pointed to a restrained response:
- Nvidia shares jumped early in after-hours but gave up much of the initial move, with commentary noting the stock was up strongly right after the release and then cooled.
- Reuters described the reaction as muted, with Nvidia up around ~1% in premarket trading the following day while broader index futures were largely steady.
Why would that happen?
1) Expectations were already sky-high.
In mega-cap “AI bellwether” earnings, it’s not just about beating estimates — it’s about beating the whisper and raising confidence that demand is accelerating.
2) Investors increasingly want proof of AI monetization, not just capex.
A growing narrative in markets is that hyperscalers and enterprises are spending enormous sums — but the next phase requires clearer evidence of sustainable ROI and cash-flow outcomes across the AI ecosystem. Reuters explicitly highlighted this “show me” stance in market tone around the report.
3) Concentration and geopolitics remain structural overhangs.
Concerns include reliance on a small number of customers and uncertainty around China-related revenue. Reuters also pointed to customer concentration trends (e.g., a large share of sales tied to a small customer set).
NVDA Stock Outlook: What Matters From Here
Nvidia’s guidance and commentary suggest momentum continues, but the stock’s next leg likely depends on a few specific investor questions:
- Can Blackwell (and rack-scale systems like GB200/GB300) keep ramping smoothly? Nvidia’s networking surge is a positive signal here.
- Do margins stay resilient amid component constraints? Markets are watching input costs closely, including memory dynamics and the impact on gross margin guidance.
- Does demand broaden beyond hyperscalers into enterprise and sovereign AI? Nvidia emphasized accelerating enterprise adoption; investors will want to see it translate into durable, diversified revenue.
- What happens with China? Nvidia’s “no assumed China data center compute revenue” guidance language signals continued uncertainty.
Conclusion
Nvidia’s Q4 FY2026 earnings were unequivocally strong: record revenue, extraordinary profitability, and a guidance outlook that implies the AI infrastructure buildout remains alive and well. At the same time, the market reaction shows NVDA is now trading in a regime where investors demand more than upside surprises — they want visibility into sustainability, diversification, and AI-driven end-demand that supports long-duration growth.
In short: Nvidia delivered the numbers. The next debate is whether the AI economy can deliver the payback that justifies continued spending at scale — and that debate is shaping how NVDA stock reacts, even to blockbuster quarters.
FAQ
When did Nvidia report these earnings?
Nvidia reported Q4 FY2026 results on February 25, 2026, for the quarter ended January 25, 2026.
What were Q4 FY2026 revenue and EPS?
Revenue was $68.1B. Non-GAAP diluted EPS was $1.62 (GAAP diluted EPS $1.76).
How big is Nvidia’s data center business now?
Data Center revenue was $62.3B in the quarter, representing the vast majority of total revenue.
What guidance did Nvidia give for next quarter?
Nvidia guided $78.0B ± 2% for Q1 FY2027 revenue, with gross margin around ~75% and a notable assumption of no China data center compute revenue.
Why didn’t the stock surge more after such strong results?
Reporting indicated the initial pop cooled quickly and the next-day tone was muted as markets look for stronger evidence of AI monetization and remain sensitive to concentration/geopolitical risks.
Disclaimer
This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. Investing in equities involves risk, including the possible loss of principal. Always do your own research and consider speaking with a qualified financial advisor before making investment decisions.
