Nvidia Smashed Earnings. Here's Why It Matters Beyond One Chipmaker.
Nvidia reported Q4 revenue of $68.1 billion Wednesday after the close, a 73% jump from a year ago that blew past the $66.2 billion Wall Street expected. Earnings per share came in at $1.62, also above estimates. The company guided for $78 billion in Q1 revenue and said it has already shipped samples of its next-generation Vera Rubin chip, which delivers 10x more performance per watt and remains on track for production in the second half of 2026.
Why this matters beyond Nvidia
Nvidia is one the most watched indicators of whether the AI infrastructure boom is real or overhyped. After weeks of anxiety about AI spending potentially slowing, and Monday's brutal selloff driven by fears that AI would destroy more value than it creates, Nvidia's results held the clearest possible answer: companies are still spending aggressively on AI chips, and the trajectory is accelerating, not flattening.
The data center segment, which now represents over 91% of Nvidia's total revenue, grew 75% year-over-year to $62.3 billion. The company said it expects to exceed $500 billion in total chip manufacturing in calendar 2026 and sees continued revenue growth throughout the year. CEO Jensen Huang also told analysts Nvidia is "close" to finalizing a $100 billion partnership with OpenAI. (*Sam Altman breathes sigh of relief*)
The broader market context
The stock rose about 2% after hours, a relatively muted reaction for a massive beat, which suggests the market had already priced in strong results after Tuesday's recovery rally. But the real significance is what Nvidia's numbers mean for the rest of the AI ecosystem: if companies are spending this much on chips, the downstream demand for energy, cooling infrastructure, raw materials, and enterprise software integration is only growing. That's the story the rest of the market will trade on.
Sources: CNBC, Bloomberg, Reuters, Nvidia