Nvidia Reports Strong Earnings but Stock Drops
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy NVDA?
Source: Fool
- Strong Earnings Report: Nvidia reported an adjusted earnings per share of $1.62 and revenue of $68.1 billion for Q4 FY2026, both exceeding Wall Street's expectations of $1.53 and $66.2 billion, indicating robust market performance and profitability.
- Optimistic Guidance: The management guided for approximately $78 billion in revenue for the current quarter, significantly above the analyst consensus of $72.6 billion, showcasing the company's ongoing growth potential in the AI sector, although this does not include potential sales from China.
- Stable Gross Margins: Nvidia achieved a 75.2% adjusted gross margin in the recent quarter and expects about 75% for the full year, demonstrating strong pricing power and enhancing investor confidence in its profitability.
- Conflicted Market Reaction: Despite the strong performance, Nvidia's stock fell by 5.5% post-earnings, reflecting market uncertainty regarding future AI investment returns, particularly as major tech firms may slow capital expenditures amid rising costs and economic concerns.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 182.650
Low
200.00
Averages
264.97
High
352.00
Current: 182.650
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Nvidia Stock Price Potential Analysis
- Significant Performance Growth: Nvidia achieved record revenue of $68 billion in Q4 of fiscal 2026, representing a 73% year-over-year increase, with earnings per share (EPS) soaring to $1.76, up 98%, demonstrating the strong demand driven by AI and solidifying its market leadership.
- Market Share Advantage: Nvidia holds a dominant 92% share in the data center GPU market, and with its leadership in AI and cloud computing, the company anticipates continued revenue growth, projecting first-quarter revenue of $78 billion, a 77% year-over-year increase, which will further enhance its competitive edge.
- Analyst Outlook: Tigress Financial analyst Ivan Feinseth reiterated a strong buy rating on Nvidia, raising the 12-month price target to $360, forecasting the company will generate $406 billion in revenue and $201 billion in operating profit over the next year, reflecting strong market confidence in its growth prospects.
- Investor Confidence Rebound: Despite concerns about an AI bubble shaking some investors, 90% of retail investors plan to maintain or increase their AI holdings, indicating long-term optimism for Nvidia, with the current stock price being relatively undervalued, presenting a buying opportunity for seasoned investors.
See More
Nvidia Stock Positioned for Potential Doubling
- Strong Market Demand: Nvidia's GPUs have become the primary hardware for training AI models, with revenue projected to grow by 70% to over $360 billion by fiscal 2027, indicating robust market demand and future growth potential in the AI sector.
- Profitability Surge: With a profit margin exceeding 50%, Nvidia is expected to become the most profitable company globally by year-end, surpassing Alphabet, showcasing its profitability and market leadership in a high-demand environment.
- Valuation Rebound Potential: Currently trading at a price-to-earnings ratio of about 22 times, significantly lower than the historical range of 40 to 50 times, if market sentiment improves, a return to a 45 times valuation could double the stock price, reflecting its reasonable valuation potential.
- Long-term Investment Confidence: Despite cautious market sentiment regarding the AI sector, hyperscalers are likely to continue investing in infrastructure, believing the risk of underinvestment is greater, suggesting that by 2026, market sentiment may recover, further driving Nvidia's stock price upward.
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Major Indexes Retreat Amid Oil Price Swings
- Oil Price Volatility Impact: Major indexes erased early gains on Tuesday due to significant swings in oil prices, indicating the market's sensitivity to energy price instability, which could lead to cautious investor sentiment and affect short-term trading strategies.
- Strong AI Stock Performance: Despite the overall market retreat, AI-related stocks showed strong performance, reflecting investor confidence in the continued growth potential of this sector, which may attract more capital inflows into related tech stocks.
- Oracle Earnings Boost Stock Price: Oracle's stock surged following its earnings report, demonstrating the company's robust performance in cloud computing and software services, which may further enhance market expectations for its future growth.
- Increased Market Volatility: The overall market's volatility has intensified, prompting investors to monitor oil price trends and their potential impact on economic recovery, which could necessitate adjustments in market strategies to address uncertainty.
See More
Bloom Energy Stock Soars 550% Amid Record Demand
- Stock Surge: Bloom Energy's stock skyrocketed over 80% at the start of 2026, trading above $150 as of March 5, reflecting a remarkable 550% increase over the past 12 months, indicating strong market confidence in its future growth.
- Significant Revenue Growth: The company reported over $2 billion in revenue for 2025, a 37.3% year-over-year increase, while achieving positive free cash flow for the second consecutive year, demonstrating ongoing financial improvement.
- Strong Market Demand: The solid-oxide fuel cell market is projected to reach $11.6 billion in the next four years, growing at a CAGR of over 31%, with Bloom's $20 billion backlog providing excellent visibility into future revenues.
- Strategic Partnerships: Bloom's $5 billion partnership with Brookfield Asset Management and plans to scale capacity from 1GW to 2GW by the end of 2026 further solidify its leadership position in the clean energy market.
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Cerebras Partners with Oracle for Cloud Computing
- Client Base Expansion: Cerebras Systems has partnered with Oracle, which now incorporates Cerebras chips into its infrastructure, marking a significant expansion in Cerebras' customer base in the cloud computing market and potentially enhancing its attractiveness for future IPO.
- Revenue Source Diversification: In the first half of 2024, 87% of Cerebras' revenue came from its Middle Eastern client G42, and the collaboration with Oracle is expected to reduce reliance on a single customer, thereby strengthening its financial stability and market competitiveness.
- Enhanced Funding Support: After filing for an IPO in 2024, Cerebras successfully completed a $1.1 billion funding round, achieving a valuation of $8.1 billion, which provides robust financial backing for its future expansion and technological innovation.
- Surging Market Demand: As AI model developers' demand for computing power continues to rise, the application of Cerebras' WSE-3 chips in cloud services is expected to further boost its market share, especially in collaborations with major clients like OpenAI.
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Analysis of Investment Prospects in Small Modular Reactors
- Limited Market Potential: While the outlook for small modular reactors (SMRs) appears promising, Precedence Research forecasts that the industry will only generate $16 billion annually by 2034, contrasting with NuScale's current market cap of nearly $4 billion, indicating a constrained market size.
- Significant Operational Risks: Currently, only two small reactors are operational, neither built by NuScale, and despite several approved designs, actual deployment may not occur until after 2030, adding uncertainty to investment prospects.
- Low Return Expectations: Investors may need to commit $100,000 rather than $10,000 to see substantial returns, which makes many investors cautious about this high-risk opportunity, especially in the absence of a mature market.
- Intensifying Competition: In addition to NuScale, companies like Nano Nuclear Energy and Oklo are also developing SMRs, and while NuScale does not need to capture the entire market, it must secure a reasonable share to achieve profitability.
See More
Nvidia Stock Price Potential Analysis
- Significant Performance Growth: Nvidia achieved record revenue of $68 billion in Q4 of fiscal 2026, representing a 73% year-over-year increase, with earnings per share (EPS) soaring to $1.76, up 98%, demonstrating the strong demand driven by AI and solidifying its market leadership.
- Market Share Advantage: Nvidia holds a dominant 92% share in the data center GPU market, and with its leadership in AI and cloud computing, the company anticipates continued revenue growth, projecting first-quarter revenue of $78 billion, a 77% year-over-year increase, which will further enhance its competitive edge.
- Analyst Outlook: Tigress Financial analyst Ivan Feinseth reiterated a strong buy rating on Nvidia, raising the 12-month price target to $360, forecasting the company will generate $406 billion in revenue and $201 billion in operating profit over the next year, reflecting strong market confidence in its growth prospects.
- Investor Confidence Rebound: Despite concerns about an AI bubble shaking some investors, 90% of retail investors plan to maintain or increase their AI holdings, indicating long-term optimism for Nvidia, with the current stock price being relatively undervalued, presenting a buying opportunity for seasoned investors.
See More
Nvidia Stock Positioned for Potential Doubling
- Strong Market Demand: Nvidia's GPUs have become the primary hardware for training AI models, with revenue projected to grow by 70% to over $360 billion by fiscal 2027, indicating robust market demand and future growth potential in the AI sector.
- Profitability Surge: With a profit margin exceeding 50%, Nvidia is expected to become the most profitable company globally by year-end, surpassing Alphabet, showcasing its profitability and market leadership in a high-demand environment.
- Valuation Rebound Potential: Currently trading at a price-to-earnings ratio of about 22 times, significantly lower than the historical range of 40 to 50 times, if market sentiment improves, a return to a 45 times valuation could double the stock price, reflecting its reasonable valuation potential.
- Long-term Investment Confidence: Despite cautious market sentiment regarding the AI sector, hyperscalers are likely to continue investing in infrastructure, believing the risk of underinvestment is greater, suggesting that by 2026, market sentiment may recover, further driving Nvidia's stock price upward.
See More
Major Indexes Retreat Amid Oil Price Swings
- Oil Price Volatility Impact: Major indexes erased early gains on Tuesday due to significant swings in oil prices, indicating the market's sensitivity to energy price instability, which could lead to cautious investor sentiment and affect short-term trading strategies.
- Strong AI Stock Performance: Despite the overall market retreat, AI-related stocks showed strong performance, reflecting investor confidence in the continued growth potential of this sector, which may attract more capital inflows into related tech stocks.
- Oracle Earnings Boost Stock Price: Oracle's stock surged following its earnings report, demonstrating the company's robust performance in cloud computing and software services, which may further enhance market expectations for its future growth.
- Increased Market Volatility: The overall market's volatility has intensified, prompting investors to monitor oil price trends and their potential impact on economic recovery, which could necessitate adjustments in market strategies to address uncertainty.
See More
Bloom Energy Stock Soars 550% Amid Record Demand
- Stock Surge: Bloom Energy's stock skyrocketed over 80% at the start of 2026, trading above $150 as of March 5, reflecting a remarkable 550% increase over the past 12 months, indicating strong market confidence in its future growth.
- Significant Revenue Growth: The company reported over $2 billion in revenue for 2025, a 37.3% year-over-year increase, while achieving positive free cash flow for the second consecutive year, demonstrating ongoing financial improvement.
- Strong Market Demand: The solid-oxide fuel cell market is projected to reach $11.6 billion in the next four years, growing at a CAGR of over 31%, with Bloom's $20 billion backlog providing excellent visibility into future revenues.
- Strategic Partnerships: Bloom's $5 billion partnership with Brookfield Asset Management and plans to scale capacity from 1GW to 2GW by the end of 2026 further solidify its leadership position in the clean energy market.
See More
Cerebras Partners with Oracle for Cloud Computing
- Client Base Expansion: Cerebras Systems has partnered with Oracle, which now incorporates Cerebras chips into its infrastructure, marking a significant expansion in Cerebras' customer base in the cloud computing market and potentially enhancing its attractiveness for future IPO.
- Revenue Source Diversification: In the first half of 2024, 87% of Cerebras' revenue came from its Middle Eastern client G42, and the collaboration with Oracle is expected to reduce reliance on a single customer, thereby strengthening its financial stability and market competitiveness.
- Enhanced Funding Support: After filing for an IPO in 2024, Cerebras successfully completed a $1.1 billion funding round, achieving a valuation of $8.1 billion, which provides robust financial backing for its future expansion and technological innovation.
- Surging Market Demand: As AI model developers' demand for computing power continues to rise, the application of Cerebras' WSE-3 chips in cloud services is expected to further boost its market share, especially in collaborations with major clients like OpenAI.
See More
Analysis of Investment Prospects in Small Modular Reactors
- Limited Market Potential: While the outlook for small modular reactors (SMRs) appears promising, Precedence Research forecasts that the industry will only generate $16 billion annually by 2034, contrasting with NuScale's current market cap of nearly $4 billion, indicating a constrained market size.
- Significant Operational Risks: Currently, only two small reactors are operational, neither built by NuScale, and despite several approved designs, actual deployment may not occur until after 2030, adding uncertainty to investment prospects.
- Low Return Expectations: Investors may need to commit $100,000 rather than $10,000 to see substantial returns, which makes many investors cautious about this high-risk opportunity, especially in the absence of a mature market.
- Intensifying Competition: In addition to NuScale, companies like Nano Nuclear Energy and Oklo are also developing SMRs, and while NuScale does not need to capture the entire market, it must secure a reasonable share to achieve profitability.
See More
