S&P 500 Earnings Overview: Key Highlights
- Earnings Performance Overview: Among the 81 S&P 500 companies reporting this week, 36 exceeded EPS expectations, 14 missed, and 1 met estimates, indicating a generally positive market performance, although some companies still face challenges.
- Nvidia's Strong Results: Nvidia (NVDA) reported a record quarterly data center revenue of $62.3 billion, up 75% year-over-year, and expects Q1 fiscal 2027 revenue to reach $78 billion, surpassing the consensus of $72.03 billion, highlighting its robust growth potential in the AI sector.
- Home Depot's Revenue Decline: Home Depot (HD) beat both top and bottom-line expectations in Q4, yet its revenue fell 3.8% year-over-year to $38.2 billion, with a forecast of 2.5% to 4.5% sales growth in FY26, reflecting challenges in the market environment.
- Block's Optimistic Outlook: Block (XYZ) matched Wall Street's consensus in Q4 earnings but raised its 2026 gross profit growth guidance to 18% with a target of $12.2 billion, resulting in a 24% stock price increase due to workforce reductions, indicating a shift towards efficiency through intelligent technology.
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NVIDIA's Q4 Earnings Performance: NVIDIA's Q4 earnings report for fiscal 2026 shows strong revenue growth driven by AI, with a revenue of $68.3 billion, surpassing market expectations and indicating robust cash flow and investment potential.
Market Segments Growth: The company experienced significant growth across critical markets, particularly in data centers, automotive, and gaming, with data center revenue accounting for over 90% of total revenue and growing by 75% year-over-year.
Future Projections: Analysts project continued strong performance for NVIDIA, forecasting $78 billion in revenue for Q1 FY 2027, reflecting a 14.7% sequential increase and a 77% year-over-year growth, excluding China.
Investor Sentiment and Stock Outlook: Analysts maintain a bullish outlook on NVIDIA's stock, with a consensus target price suggesting significant upside potential, supported by strong cash flow and a healthy balance sheet, positioning the company well for future growth.
- Strong Performance: Nvidia reported an adjusted earnings per share of $1.62 for the quarter ending January 25, with revenue soaring 73% year-over-year to $68.13 billion, significantly exceeding Wall Street's forecast of $65.91 billion, indicating robust market demand and execution.
- Data Center Revenue Surge: Data center revenue reached $62.13 billion, surpassing expectations of $60.36 billion, reflecting a surge in enterprise demand for AI computing, further solidifying Nvidia's leadership in the AI sector.
- Optimistic Outlook: The company anticipates revenue of $78 billion for the upcoming fiscal first quarter, excluding any revenue from China, showcasing confidence in global markets while also indicating a cautious stance towards the Chinese market.
- Dividend Announcement: Nvidia declared a quarterly dividend of $0.01 per share to be paid on April 1, enhancing investor confidence and demonstrating the company's ability to return value to shareholders supported by strong cash flow.
- Market Underestimation: Dan Ives from Wedbush Securities pointed out that Wall Street analysts have severely underestimated Nvidia's valuation, particularly ahead of the upcoming fourth-quarter earnings report, indicating a neglect of the company's potential.
- Surge in AI Demand: Ives emphasized that with the skyrocketing demand for artificial intelligence, Nvidia's chips play a crucial role in driving the AI revolution, making its future earnings pivotal.
- Performance Expectations: Ives anticipates a 'gold medal performance' from Nvidia, reflecting not only his confidence in the company's strong earnings but also potentially influencing investor perceptions of its stock.
- Stock Price Reaction: At the time of writing, Nvidia's shares were trading 2% higher, indicating a positive market response to the optimistic expectations surrounding the upcoming earnings report and analyst sentiments.
- Deal Details: Meta will purchase 6 gigawatts of AMD's graphics processing units (GPUs) and become a lead customer for AMD's sixth-generation EPYC central processing units (CPUs), showcasing Meta's strong demand and strategic positioning in the AI sector.
- Equity Incentives: As part of the deal, Meta will receive warrants for up to 160 million shares of AMD, representing about a 10% stake based on current share count, providing Meta with potential future equity appreciation.
- Supply Chain Diversification: By collaborating with both AMD and Nvidia, Meta aims to reduce reliance on a single supplier, thereby lowering costs through a diversified source of AI chips, enhancing its data center competitiveness.
- Financial Performance: Meta's revenue grew by 24% last quarter, reflecting strong returns on its AI investments, and with a forward P/E of 21 times, it appears highly attractive in the current market environment.
- Cloud Computing Leadership: Amazon's AWS division has attracted over 500 top startups in the U.S., indicating strong demand in the cloud computing market, which is expected to provide sustained growth momentum for the company in the future.
- Capital Expenditure Strategy: Amazon plans to allocate $200 billion in capital expenditures primarily to AWS to support AI-related workloads, demonstrating the company's confidence in the long-term profitability of this sector.
- E-commerce Innovation Expansion: Amazon has launched its discount retail Amazon Hall in over 25 countries and, by combining Whole Foods' physical stores with online shopping, has become the grocery choice for over 150 million people in the U.S., further solidifying its leadership in the e-commerce market.
- Prime Service Value Addition: Amazon's Prime service continues to enhance user experience by adding new features, including AI-driven chat capabilities and integrations with popular consumer products, which drives sales growth.
- Strategic Investment: Meta has entered into an agreement with AMD to purchase 6 gigawatts of graphics processing units (GPUs) and become a lead customer for AMD's sixth-generation EPYC central processing units (CPUs), which is expected to significantly enhance Meta's computing capabilities in the AI sector.
- Equity Stake: Meta will receive warrants for up to 160 million shares of AMD, which represents about a 10% stake based on current share counts, providing Meta with a more cost-effective chip procurement strategy.
- Capital Expenditure Plans: Meta plans to invest between $115 billion and $135 billion in capital expenditures in 2023, demonstrating a significant strategic commitment to AI technology aimed at reducing reliance on Nvidia and diversifying its supply chain.
- Financial Attractiveness: With a forward P/E ratio of 21 times, coupled with its nearly $35 billion investment in AMD, Meta's stock appears attractive at current levels, potentially making it a top choice for investors.











