NVIDIA does it again?
NVIDIA beat expectations on earnings for Q4 and provided guidance higher than market estimates for the next quarter… again. Revenue was $68.13 billion, topping analyst expectations of $66 billion, and EPS stood at $1.62 per share, above the $1.53 forecast. Data center revenue, which is the core growth engine, came in at $62.3 billion for the quarter, ahead of expectations of ~$60.7 billion. NVIDIA forecast its Q1 revenue around $78 billion compared to the wall street expectations of $74 billion.
On the supply side, the company said it secured sufficient chip inventory and capacity to meet demand over the next few quarters. Despite a stellar report, the stock traded flat on the news.
Breaking down the buzz:
Beneath the headlines "beat and raised outlook", management explicitly said its current quarter guidance does not assume any material revenue from the data center chip sales into China even though it recently received 'limited export' licenses. This raises concerns about the ongoing geopolitical backdrop that could constrain growth.
Revenue concentration is creeping higher, with two customers accounting for roughly 39% of sales. Investors also pressed management on capital distribution strategies. An analyst asked if NVIDIA is going to distribute some of the $100 billion in cash flow back to shareholders since the shares have traded relatively flat. The CFO responded that NVIDIA prefers to reinvest in the AI ecosystem, which significantly increases returns to shareholders in the long term.
Why this matters:
NVIDIA is the proxy for the AI infrastructure cycle. Strong beats and elevated guidance suggest that spending remain at all-time highs, reinforcing the commonly heard belief that AI has a long runway, which is going to require years of build-out.
But dependence on a few mega customers raised questions about risk of competition. We recently saw Meta partner with AMD for $60 billion worth of chips.
Another point is the limited access to China leaves a vast market under-penetrated. This is especially important considering that Nvidia's revenue growth has slowed down. The last triple-digit growth came six quarters ago. Access to Chinese customers might be the catalyst needed to ignite the re-acceleration narrative.
Lastly, management's prioritation of reinvest over buybacks or dividends shows a preference to double down on the long-term ecosystem leadership. While this does give confidence to investors on the runway of AI CapEx, investors still looked at the broader earnings report with a cautious lens as the stock remained flat during the day.
Copy my portfolio for steady and consistent growth, $NVDA (NVIDIA Corporation)... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
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Fri Jun 12 2026 01:29:56 GMT+0000 (Coordinated Universal Time)
