Nvidia's Fourth-Quarter Earnings Report: A Year of Remarkable Growth

Nvidia CEO Jensen Huang recently showcased the new Blackwell GeForce RTX 50 Series GPU, highlighting the company’s continued innovation in graphics technology.

Nvidia will announce its fourth-quarter earnings this Wednesday after the market closes. Analysts have high expectations for this report, with consensus estimates indicating:

• EPS: $0.84, adjusted
• Revenue: $38.04 billion

This earnings report is set to cap off what many consider one of the most extraordinary years in the history of a large company. In the last quarter alone, analysts anticipate a revenue increase of 72% compared to the same period last year. Beyond that, Nvidia is expected to report that its overall sales for the entire fiscal year have surged to nearly $130 billion, more than double the previous year's performance.

A key factor driving this remarkable growth is the company's data center graphics processing units (GPUs), which are essential for creating and operating artificial intelligence applications such as OpenAI's ChatGPT. Over the last two years, Nvidia's stock price has skyrocketed by more than 440%, briefly making it the most valuable company in the U.S. with a market capitalization surpassing $3 trillion.

However, the stock's rapid ascent has moderated in recent months, with its price stabilizing around levels seen last October. Investors are now keenly focused on what lies ahead for Nvidia, particularly whether the company can maintain its growth trajectory.

On the day of the earnings report, Nvidia’s CEO Jensen Huang will address investor concerns and questions about the unfolding landscape of artificial intelligence two years into its boom. One major concern among investors is whether Nvidia's most significant clients, particularly hyperscale cloud companies, have begun to curtail their spending after a period of heavy investment.

The market was recently stirred by the introduction of a new AI model from Chinese firm DeepSeek, named R1. This prompted speculations that less Nvidia hardware might be needed for developing advanced AI systems, which has led to trepidations among investors.

Furthermore, U.S. officials are contemplating additional restrictions on Nvidia's AI chip exports to China, given national security considerations. Currently, the company is already restricted from shipping its most advanced AI chips to China, and it produces special versions of its chips tailored for the market.

Investors will also be monitoring how the rollout of Nvidia's latest AI chip, Blackwell, is progressing. There have been reports indicating that distribution might be slower than anticipated due to issues with heat management and manufacturing yields.

Current estimates from Morgan Stanley suggest that Microsoft will account for approximately 35% of Blackwell spending in 2025, with other significant contributions from Google, Oracle, and Amazon. Recently, analysts from TD Cowen reported that Microsoft has canceled some leases with private data center operators and paused negotiations for new leases. This news raised alarm about the future of AI infrastructure spending, a market segment heavily reliant on Nvidia's technology.

In response to these concerns, Microsoft reaffirmed its commitment to invest $80 billion in infrastructure within the next two years. Other major clients have also outlined substantial capital expenditure plans, with Alphabet targeting $75 billion, Meta up to $65 billion, and Amazon proposing an ambitious $100 billion spending target.

Morgan Stanley analyst Joseph Moore, who has a price target of $152 on Nvidia stock, commented that despite potential delays, the demand for GPUs from Microsoft remains unchanged. As the earnings report approaches, investors will be carefully listening for any updates about Nvidia's relationships with cloud companies, as well as guidance for fiscal 2026, particularly regarding expected growth over the elevated sales recorded last year.

Nvidia, Earnings, Growth