Nvidia Stock Drops Despite Strong Q4 Earnings

Wall Street unimpressed by Nvidia's Q4 beat and Q1 guidance

Feb. 26, 2026 at 5:03pm

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Nvidia (NVDA) stock fell more than 4% on Thursday despite the company reporting strong Q4 earnings and Q1 guidance that beat Wall Street estimates. The company's data center business, which makes up the majority of its revenue, saw significant growth, but investors remain uncertain about the long-term outlook for the AI trade.

Why it matters

Nvidia is a bellwether for the semiconductor industry and its performance is closely watched as a barometer for the broader tech sector. The company's stock drop despite solid financial results highlights ongoing investor concerns about the sustainability of the AI boom and its impact on Nvidia's future growth.

The details

For Q4, Nvidia reported earnings per share of $1.62 on revenue of $68.1 billion, topping Wall Street's estimates of $1.53 EPS on $65.8 billion in revenue. The company's data center business, which includes its compute, graphics, and networking chips, drove the majority of the growth, bringing in $62.3 billion. Nvidia's Q1 guidance of $76.44 billion to $79.56 billion also exceeded analysts' projections of $72.8 billion. However, the company's gaming revenue of $3.7 billion missed estimates of $4 billion.

  • Nvidia reported its Q4 2026 earnings on February 26, 2026.
  • Nvidia is set to host its annual GTC conference in San Jose, California in the coming weeks.

The players

Nvidia

An American multinational technology company that designs graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market.

Colette Kress

Nvidia's Chief Financial Officer.

Gene Munster

Managing partner at Deepwater Asset Management, who provided analysis on Nvidia's stock performance and the long-term outlook for the AI trade.

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What they’re saying

“For the fourth quarter, hyperscaler revenue increased and remained our largest customer category at slightly over 50% of Data Center revenue, while growth was led by the rest of our Data Center customers as revenue diversified.”

— Colette Kress, Chief Financial Officer, Nvidia (Nvidia Earnings Call)

“The real debate is what growth looks like in 2027 and 2028. Ultimately, investors have to decide what inning of the AI buildout we are in, if it's the fifth inning, 2027 growth should look more modest, and if it is the second inning, which I believe, Nvidia's growth outlook over the next several years remains robust.”

— Gene Munster, Managing Partner, Deepwater Asset Management (Deepwater Asset Management Blog)

What’s next

Nvidia is expected to make several major product announcements at its upcoming GTC 2026 event in San Jose, California, which could provide more clarity on the company's long-term growth prospects.

The takeaway

Nvidia's strong Q4 results and optimistic guidance were not enough to satisfy Wall Street, as investors remain cautious about the sustainability of the AI boom and its impact on the company's future growth. The stock's performance highlights the ongoing uncertainty surrounding the semiconductor industry and the tech sector as a whole.