TLDR
- Nvidia is set to release Q4 fiscal 2026 earnings post-Wednesday market close, with analysts anticipating $61 billion in data center revenue, a 70% year-on-year rise.
- Adjusted earnings per share are projected to be $1.53, up from $0.89 in the prior year.
- Gross margin is the critical metric to monitor — analysts predict around 75%, and any decline could indicate diminishing pricing power.
- Competition is intensifying, as Meta has inked a significant AMD GPU deal and hyperscalers are creating their own AI chips.
- Nvidia stock has remained mostly stable since October, rising only 3.4%, whereas AMD has surged 32% over the same timeframe.
Nvidia is scheduled to report fourth-quarter fiscal 2026 earnings following the market close on Wednesday, February 25.
Wall Street is closely observing. FactSet-tracked analysts foresee $61 billion in data center revenue for the quarter, a 70% leap from the corresponding period last year.
To contextualize, recorded only $3.6 billion in data center revenue during Q4 2023, around the time ChatGPT was launched. The growth since then has been remarkable.
Adjusted earnings per share are projected at $1.53, up from $0.89 in the previous year — a 72% rise.
But the figure analysts deem most significant isn’t revenue or EPS. It’s gross margin.
Why Gross Margin Is the Real Story
Consensus estimates place Nvidia’s gross margin for the quarter at approximately 75%, up from 73% in the prior year. On a GAAP basis, analysts estimate 74.8%.
That figure is crucial as it informs investors whether still holds premium pricing for its GPUs.
Two factors have sustained that pricing power: the superior performance of Nvidia’s Hopper and Blackwell GPU series, and demand that has consistently exceeded supply.
If Nvidia forecasts fiscal 2027 gross margin in the 74–75% range or higher, it’s broadly viewed as a positive sign. It would imply customers are still willing to pay top dollar for upcoming products such as Blackwell Ultra and the Vera Rubin GPU.
If gross margin guidance falls to the low 70s or lower, it’s a different scenario — one that would likely indicate competitive pressure is beginning to take effect.
Competition Is Closing In
The competitive environment has changed significantly in recent months.
On Tuesday, Meta Platforms entered a significant deal with to utilize its GPUs in some data centers. This is the second major AMD deal in recent months — OpenAI reached a similar agreement in October.
In both instances, AMD provided warrants to purchase up to roughly 10% of its stock at a penny per share, linked to performance benchmarks. Nvidia also has deals with Meta and OpenAI, but hasn’t offered equity as a rebate.
Amazon Web Services, Microsoft Azure, and Google Cloud are all developing their own custom AI chips for customers. Several AI chip startups are also vying for a share of the market.
AMD’s data center revenue remains less than one-tenth of Nvidia’s, and was growing more slowly when AMD released its own Q4 results earlier this month.
Despite all AI spending projections for 2026, Nvidia stock has stayed mostly flat since October, rising only 3.4%, whereas AMD has surged 32% over the same period.
Nvidia closed Tuesday’s trading at $192.85, a 0.7% increase for the day.
CEO Jensen Huang is set to converse with analysts at 5 p.m. Eastern time on Wednesday after the earnings release.
