Nvidia Earnings Results Steady Markets as AI Spending Debate Intensifies
TL;DR
Nvidia's strong Q4 earnings, with revenue up 73% to $68.1B, boosted U.S. stocks and eased AI spending concerns. CEO Jensen Huang emphasized the need for trillions more in AI infrastructure investment, countering bubble fears. The results lifted semiconductor shares and crypto assets, highlighting ongoing market optimism.
Key Takeaways
- •Nvidia reported Q4 revenue of $68.1 billion, up 73% year-over-year, driven by data-center demand, reinforcing its key role in AI infrastructure.
- •CEO Jensen Huang argued AI is in early stages, requiring trillions in investment for energy, chips, and data centers, dismissing bubble concerns.
- •U.S. stocks, led by tech gains, edged higher post-earnings, with Nvidia shares rising 1.37% and crypto assets like Bitcoin and Ethereum surging.
- •Analysts debate AI spending sustainability, with Goldman Sachs forecasting peak capex in 2026, while Ark Invest sees it as the start of a multi-year cycle.
- •Nvidia's guidance projects further growth, with $78 billion in Q1 revenue forecast, despite excluding China sales, indicating resilient AI investment.
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U.S. stocks edged higher late Wednesday as investors weighed another blockbuster earnings report from Nvidia against lingering concerns over the scale and sustainability of global AI investment.
Nvidia reported fourth-quarter revenue of $68.1 billion, up 73% from a year earlier, driven almost entirely by continued demand for data-center infrastructure.
Sales in that segment rose 75% to $62.3 billion, reinforcing the company’s central role in the artificial-intelligence buildout that has underpinned equity markets over the past year.
"Nvidia has sent a clear message to the market with this result that the AI infrastructure buildout is only accelerating," Josh Gilbert, market analyst at eToro, told Decrypt. "Every quarter, the sceptics line up, and quarter after quarter, Nvidia has managed to prove them wrong."
Net income nearly doubled to $43 billion, while gross margins held at about 75%, reflecting strong pricing power.
The results helped lift semiconductor shares and supported a modest rebound in broader equity benchmarks after a volatile start to the week.
The Nasdaq outperformed, advancing 1.26% while the S&P 500 closed higher at 0.8% as gains in megacap technology stocks offset weakness in more cyclical sectors. Shares for Nvidia in after-hours trading rose 1.37% to $198.31.
Crypto also saw major valuation gains in blue-chip assets, including Bitcoin and Ethereum, which jumped 7% and 12.5%, respectively, ahead of the earnings release.
Treasury yields fell across most maturities, signalling continued caution in rates markets even as equities stabilized.
Nvidia’s guidance, meanwhile, added to the sense that AI spending remains resilient.
The company forecast first-quarter fiscal 2027 revenue of about $78 billion, implying further sequential growth, despite excluding any contribution from China data-centre sales.
Management said customers continue to invest aggressively to scale inference and deploy so-called agentic AI systems.
The earnings echoed comments made last month by Nvidia Chief Executive Jensen Huang at the World Economic Forum in Davos, where he argued that AI is still in the early stages of what he described as the “largest infrastructure buildout in human history.”
Huang said trillions of dollars in additional investment would be needed across energy, chips, and data centres to support the technology’s long-term potential, pushing back against fears that the sector is already in a bubble.
Goldman Sachs has forecast that AI capital expenditure growth will peak in 2026 and then decelerate, which investors see as a mixed signal: growth will remain, but cash-flow visibility could improve only as spending slows.
Cathie Wood's Ark Invest, by contrast, has argued that AI infrastructure spending is still in its early stages, framing the current surge in capital outlays by hyperscalers as the start of a multi-year investment cycle rather than a peak.
"Nvidia has locked in $95.2 billion in inventory and capacity commitments, nearly double the level from a year ago," Gilbert said. "When the world's biggest companies are spending at this pace, you'd better be ready to deliver."
Editor's note: Adds comment from eToro analyst Josh Gilbert