Quick Summary Nvidia posted a 75.2% adjusted gross margin , among the highest in Big Tech AI hyperscalers plan US$650B capex in 2026 , much flowing to Nvidia Rivals like AMD, Alphabet and Amazon are gaining traction Long-term margin sustainability remains the key investor question Margins Steal the Show While investors already expected strong demand, NVIDIA Corp surprised with something even more impressive: Adjusted gross margin of 75.2% , the highest since late 2024 — and management expects similar levels next quarter. For a nearly US$5 trillion company , that margin signals extraordinary pricing power in AI hardware. AI Spending Wave Still Intact AI hyperscalers are forecasting ~US$650 billion in capex for 2026 , up roughly 60% from 2025. Nvidia remains the primary beneficiary as demand for data centre GPUs continues to surge. But maintaining 75% margins depends on two big factors: 1️⃣ Supply Constraints Rising memory costs remain a ris...
Quick Summary
Nvidia guides Q1 sales at US$78 billion, above consensus
Shares fell ~1% despite strong numbers
China revenue excluded from outlook
AI spending sustainability still questioned
Upbeat Forecast, Lukewarm Reaction
Nvidia Corp projected fiscal Q1 revenue of US$78 billion, beating Wall Street’s average estimate of US$72.8 billion.
However, some bullish analysts had expected numbers closer to US$80 billion — and the stock slipped about 1% after the announcement.
Key point: Nvidia is still growing fast — but expectations are even higher.
Q4 Results Still Massive
For the quarter ended Jan 25:
Revenue surged 73% to US$68.1 billion
EPS: US$1.62 (vs US$1.53 expected)
Adjusted gross margin: 75.2%
Data-centre revenue: US$62.3 billion (above estimates)
Nvidia remains the dominant supplier of AI accelerator chips powering global data centres.
China: Still a Big Unknown
The company:
Excluded China data-centre revenue from Q1 guidance
Received US approval to ship “small amounts” of H200 chips
Faces 25% tariff on certain imports
Nvidia acknowledged it has not yet generated revenue under the new H200 licence.
China remains a geopolitical overhang on the stock.
AI Spending Debate Continues
CEO Jensen Huang maintains AI demand is structural, not cyclical:
“Customers are racing to invest in AI compute — the factories powering the AI industrial revolution.”
But concerns persist that:
AI capital spending may be peaking
Memory chip shortages could pressure supply
Large AI megadeals may reflect circular commitments
Segment Breakdown
Data Centre: US$62.3b (strongest driver)
Gaming: US$3.73b (below expectations)
Automotive: US$604m (missed estimates)
Meta has committed to deploying millions of Nvidia chips, while rival Advanced Micro Devices has secured similar AI capacity deals.
Why Investors Are Harder to Impress
After becoming the world’s most valuable company during the AI boom, Nvidia now faces:
Lofty valuation
Elevated expectations
Growing scrutiny of AI demand sustainability
Even strong beats are no longer enough — the market wants acceleration, not just growth.
Bottom Line
Nvidia continues to post extraordinary growth, but investors are signalling that the bar is extremely high.
With China uncertainty and AI spending debates in focus, the stock’s next move will likely depend on whether demand proves durable — not just explosive.
Key Takeaways
Q1 forecast beats consensus but disappoints bulls
China revenue excluded from guidance
AI megadeals continue
Market demands sustained momentum
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