AI chip leader Nvidia once again posted what can only be described as explosive results. Amid recent product launches from Anthropic and a widely circulated “doomsday report” from Citrini that heightened investor anxiety, Nvidia’s latest earnings reaffirmed that AI-driven demand remains strong and large-scale AI infrastructure buildout is still on track.

According to the earnings report, for the fourth quarter of fiscal 2026, which ended January 25, Nvidia’s revenue surged 73% year over year to a record $68.1 billion, surpassing analysts’ consensus estimate of $65.9 billion. Even more encouraging for investors was Nvidia’s stronger-than-expected guidance for the first quarter of fiscal 2027. The company projected revenue of $78.0 billion, significantly above the widely expected $72.8 billion, implying an acceleration in year-over-year growth to 77%.

By segment, the data center business — which includes Nvidia’s industry-leading AI accelerators and networking products — posted fourth-quarter revenue of $62.3 billion, up 75% year over year and also a record high, exceeding analyst expectations of $60.4 billion. However, other segments showed relative softness. Gaming revenue rose 47% year over year to $3.73 billion, below the expected $4.01 billion. Automotive revenue increased 6% to $604 million, missing forecasts of $643 million.

With both total revenue and data center revenue beating expectations and setting new records, and gross margins improving as Blackwell production scales, Nvidia also issued stronger guidance for the first quarter of fiscal 2027 even without including certain revenue from China. This reinforced the narrative of resilient demand for AI computing power and helped ease concerns about a potential AI investment bubble.

Nvidia’s CEO stated that customers are racing to invest in AI compute capacity, building “AI factories” that will power the AI industrial revolution and its future growth. Replacing the world’s installed base of legacy computing infrastructure with machines capable of delivering productivity breakthroughs will take years.

One key overhang for the technology sector remains memory chip shortages. Like most electronics companies, Nvidia relies on a stable supply of memory components, which provide short-term storage for devices ranging from smartphones to supercomputers. Supply constraints have pushed up memory chip prices and placed pressure on Nvidia’s shipment volumes this year. In response, Nvidia stated that it has secured sufficient supply, strategically locking in inventory and production capacity to meet demand beyond the next several quarters.

Market Interpretation:

Nvidia is still awaiting clarity on whether it can continue operating in China at scale. China is its largest market, but its ability to sell the most advanced products to Chinese customers remains restricted. The company noted that its first-quarter revenue outlook does not include any contribution from China’s data center business.