NVIDIA Posts Record $68B Quarter but Shares Fall 4%

NVIDIA reported record revenue of $68.1 billion for the fourth quarter of fiscal 2026, ended January 25, 2026, marking a 73% increase from the same period a year ago and a 20% rise from the previous quarter. For the full fiscal year 2026, the company generated $215.9 billion in revenue, up 65% year over year.

Gross margins for the quarter came in at 75.0% on a GAAP basis, improving from 73.4% in the prior quarter and 73.0% a year ago. Net income for the quarter reached $42.96 billion, up 94% from the same quarter last year. Diluted earnings per share were $1.76 on a GAAP basis.

The company’s Data Center segment drove most of the growth, generating $62.3 billion in the fourth quarter alone, up 75% year over year. Full-year Data Center revenue reached a record $193.7 billion. Gaming revenue for the quarter came in at $3.7 billion, up 47% from a year ago but down 13% sequentially as holiday-season channel inventory normalized.

NVIDIA also posted record revenues in its Professional Visualization and Automotive segments. Professional Visualization brought in $1.3 billion for the quarter, up 159% year over year, while Automotive revenue of $604 million marked a 39% full-year gain.

For the first quarter of fiscal 2027, NVIDIA guided revenue of $78 billion, plus or minus 2%, well above the analyst consensus estimate of $72.6 billion at the time of reporting. GAAP gross margins are expected at 74.9% for the coming quarter.

Despite the strong results and forward guidance, NVIDIA shares fell approximately 4% on Thursday to $187.6, dragging other chip stocks including Broadcom and Advanced Micro Devices lower. The decline came as investors focused on the company’s continued reinvestment into the broader AI ecosystem rather than returning more capital to shareholders.

NVIDIA’s chief financial officer indicated that the company intends to keep investing in AI infrastructure rather than expanding shareholder returns, even as the company is expected to generate close to $100 billion in cash during the current fiscal year. During fiscal 2026, NVIDIA returned $41.1 billion to shareholders through share repurchases and dividends, with $58.5 billion still remaining under its buyback authorization.

The stock drop also carried a technical dimension, with NVIDIA shares falling below their 50-day and 100-day moving averages, levels that traders watch closely as indicators of broader selling pressure. The company’s forward price-to-earnings ratio stood at 24.5 times at the time of the report, down sharply from 34.6 times when NVIDIA first reached a $5 trillion market capitalization in late October 2024. That ratio now sits below AMD’s forward PE of 28.8 and well below Intel’s 81.4.

Competitive concerns also weighed on sentiment. Major cloud providers including Amazon Web Services, Google Cloud, Microsoft Azure, and Oracle have begun investing heavily in custom silicon as an alternative to third-party GPUs. Large customers such as Meta Platforms have forecast combined capital expenditure of at least $630 billion in 2026, predominantly directed toward data centers and processors, but with a growing portion being allocated to non-NVIDIA solutions.

On the supply side, NVIDIA addressed questions about potential constraints at its primary chip manufacturer TSMC, stating it had secured sufficient inventory and production capacity to meet demand through several upcoming quarters. The company did acknowledge, however, that supply tightness would have some impact on its gaming product line.

NVIDIA unveiled several new hardware and software platforms during the quarter, including the Rubin chip architecture, which the company says will deliver up to a 10x reduction in inference token cost compared to the current Blackwell platform. Major cloud providers are expected to be among the first to deploy Rubin-based systems. The company also announced a multiyear strategic partnership with Meta covering millions of Blackwell and Rubin GPUs, alongside expanded collaborations with Anthropic, CoreWeave, Siemens, and Synopsys.

Beginning in the first quarter of fiscal 2027, NVIDIA will include stock-based compensation expense in its non-GAAP financial measures, a change that is expected to add approximately $1.9 billion to reported non-GAAP operating expenses and have a 0.1% impact on non-GAAP gross margins. The company’s next quarterly cash dividend of $0.01 per share is scheduled for payment on April 1, 2026, to shareholders of record as of March 11, 2026.