Executive Snapshot

On February 25, 2026, shares finished at $195.62, up +4.03% (5D) and +4.86% (YTD), with 250.6 million shares traded, above the 20-day average of 177.8 million.

Due to the ongoing demand for AI infrastructure, NVIDIA Q4 FY2026 revenue increased to $68.1 billion (+73% YoY).

Data Center continued to be the obvious growth driver with NVIDIA data center revenue of $62.3 billion (+75% YoY).

With about 75% gross margins in Q4 (GAAP 75.0%, non-GAAP 75.2%), profitability remained high.

The revenue forecast for the upcoming quarter is $78.0 billion ±2%, assuming that no data centers generate revenue from China.

What’s moving the stock now

The “China assumption” is the headline swing factor.

The forecast for the upcoming quarter specifically states that there will be no revenue from data centers in China. Because it transforms a significant source of uncertainty into a tangible scenario, investors usually focus on this. One question must therefore be addressed by the market: can demand elsewhere completely replace that lost component, and if so, for how long?

The numbers are still scaling quickly — but the mix is concentrated.

Performance is closely linked to cycles of AI infrastructure spending, with data centers accounting for $62.3 billion of the $68.1 billion in overall revenue in Q4. Strong outcomes are helpful, but policy, supply, or consumer timing changes may also be more important. This focus can intensify responses.

The news flow is centered on AI infrastructure and export restrictions.

Partnerships for AI infrastructure and the uncertainty surrounding Chinese exports have been highlighted in recent news. These elements collectively explain why the stock may move in tandem with the "growth upside" and "policy constraint" narratives.

Expectations Gap

Latest quarter (Q4 FY2026 — reported Feb 25, 2026)

• Revenue: $68.13B vs ~$65.91B estimated → +$2.22B (+3.37% surprise).
• Adjusted EPS: $1.62 vs ~$1.53 estimated → +$0.09 (+5.88% surprise).

Not only did the quarter "beat," but it also outperformed the bottom line (profit per share) and the top line (sales). This typically indicates that demand was high and profitability held up better than anticipated. In each of the four quarters, revenue exceeded projections (4/4). With the exception of Q1 FY2026, adjusted EPS has outperformed in three of the last four quarters (3/4). Both the revenue and EPS surprises returned to the upper end of this four-quarter range in Q4, indicating that the company met high expectations.

Guidance vs expectations.

Revenue:

• Guidance / current estimate: $78.0B
• Pre-earnings consensus: ~$72.0B–$72.78B
• That implies a step-up of ~+7% to +8% versus the earlier consensus range.

Adjusted EPS:

• Current estimate: $1.65–$1.68
• Pre-earnings consensus: ~$1.54
• That implies an upward revision of ~7% to ~9% in near-term profit expectations.

The market's primary "expectations gap" concerns whether forward growth remains close to the new, higher threshold, particularly in light of the China assumption, rather than whether the most recent quarter was robust, as it was.

Operating read-through

Growth engine: Data Center remains dominant.

With data center sales at $62.3 billion (+75% YoY), Q4 revenue increased by 73% YoY to $68.1 billion. This suggests that demand for AI infrastructure remains the main driver of expansion.

Margins: still exceptionally high.

Gross margins of about 75% indicate strong pricing and product mix. Practically speaking, this means that a significant share of every additional dollar of revenue goes toward profit.

Operating leverage: very large profit scale.

Despite high operational costs, GAAP operating income in Q4 was $44.3 billion, indicating strong operating leverage.

Cash conversion: strong and visible.

Free cash flow was $34.9 billion, and operational cash flow was $36.2 billion in Q4. Because it supports shareholder returns and reinvestment without depending on outside funding, that amount of cash creation is important.

Capital returns: aggressive, backed by cash generation.

In FY2026, shareholder returns (repurchases plus dividends) totaled $41.1 billion, with $58.5 billion in authorized buybacks. If cash flow remains robust, this provides flexibility to continue returning capital.

Valuation + positioning

Where the stock sits in its range:

• 52-week range: $86.62 to $212.19
• At $195.62, the stock is below the 52-week high but far above the low — suggesting it’s trading in the upper part of its yearly range even after a choppy 3-month stretch (-7.51%).

Price behavior (recent):

• 1M +4.20%, 5D +4.03%, YTD +4.86%
• The last 3 months (-7.51%) show that volatility remains real even while the longer arc has stayed strong.

Volume indicates elevated attention.

The most recent volume (250.6M) was higher than the 20D average (177.8M), which is consistent with significant positioning and a response to significant changes.

Valuation anchor

• Market cap: $4.75T
• P/E (TTM): 47.02x

Usually, this multiple indicates that the market is pricing in sustained strong growth and robustness. Forward commentary, such as the China assumption, can have a disproportionate impact when expectations are this high.

Catalysts

Execution for the next quarter compared to the $78.0B ±2% forecast.

Clarity regarding the timing of data center revenue relating to China: Does the "zero China compute revenue" assumption stay the same, or does it change?

Demand updates on AI infrastructure: ongoing proof that capacity-building remains robust worldwide.

Pace of capital return: continuous buyback activity in comparison to the substantial amount of authorization that remains.

Risks

The projection highlights the actual sensitivity to export restrictions by assuming no China Data Center compute revenue, which makes policy/export risk obvious.

Concentration risk: Since data centers are the main source of income, any slowdown in the investment in AI infrastructure could have a disproportionate impact.

Expectation risk: even strong numbers can be evaluated against forward guidance and assumptions, and the market bar remains high at 47x trailing P/E.

Volatility risk: Despite brief gains, the stock has declined over the past three months, underscoring how quickly sentiment can shift.

Shariah compliance

As of February 2026, NVDA is classified as Shariah-compliant with an A- Musaffa rating based on the Shariah Screening results at Musaffa. NVDA`s latest financial report was used to conduct screening analysis in line with the AAOIFI methodology. NVDA passed all three required screening thresholds, with 97.66% of revenue meeting the permissible threshold. Both interest-bearing assets and debt remain below 30% of the 36-month average market capitalization.

Bottom line

According to the most recent data, NVIDIA is operating at a scale never seen before, with record revenue and extremely high margins, while maintaining a strong cash-generating position. Simultaneously, the projection for the upcoming quarter clearly establishes a constraint: zero China Data Center compute revenue. This becomes the primary variable that investors will monitor. The arrangement suggests that, despite that limitation, short-term performance will depend on whether global AI demand can sustain growth at the higher level suggested.

Sources

• NVIDIA Corp. Stock Analysis
• NVIDIA Corp Stock News from GuruFocus
• NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2026

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