Nvidia Delivers Another AI-Fueled Earnings Beat — So Why Was the Stock Reaction So Modest?

Nvidia NVDA +1.41% ▲ , the chipmaker at the center of the artificial-intelligence boom, reported fiscal fourth-quarter results after Wednesday’s close, topping Wall Street estimates on both earnings and revenue. However, the stock showed only a modest after-hours reaction, up 0.2%, indicating much of the strength had already been priced in.

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The company posted earnings of $1.62 per share, ahead of expectations for $1.54, while revenue jumped 73% year over year to $68.1 billion, also above forecasts. For the full fiscal year 2026, revenue reached $215.9 billion, up 65%, with non-GAAP earnings per share of $4.77.

Even though Nvidia exceeded estimates, investors had entered the report with very high expectations, which limited the market’s response.

Data Center Business Continues to Drive Growth

The real driver was once again Nvidia’s data center business. Quarterly data center revenue totaled $62.3 billion, up 75% year over year, as cloud providers and large enterprises continued to invest heavily in AI infrastructure.

The company also highlighted new platforms, chips, and partnerships aimed at lowering AI computing costs, a key focus as customers look to scale workloads efficiently.

Guidance Shows AI Demand Still Strong

More important than the quarterly beat was the outlook. Nvidia guided first-quarter fiscal 2027 revenue to about $78 billion, well above the roughly $72 billion analysts had expected. Gross margin is projected near 75%, signaling the company still has pricing power despite rising component costs.

The guidance indicates that the wave of AI infrastructure spending from hyperscale cloud companies and enterprise customers remains intact.

What Investors Will Watch Next

After this report, the key question shifts from whether AI demand exists to how long it can continue at this pace.

Markets will watch for signs that cloud companies keep expanding capacity through 2026 and beyond, as well as updates on new chip platforms and large customer commitments.  Because Nvidia sits at the center of the AI supply chain, its outlook often influences sentiment across semiconductor, software, and broader technology stocks.

For now, the report confirmed that AI demand remains strong, but it did not significantly raise expectations for future growth. Investors were looking for signs that spending was accelerating even further. Instead, Nvidia largely validated what the market already believed, which kept the stock reaction restrained.

Is Nvidia a Good Stock to Buy?

On TipRanks, Nvidia stock commands a Strong Buy consensus rating based on 35 Buys, one Hold, and one Sell rating. The average Nvidia price target of $266.23 implies 40.29% upside potential from current levels.

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