NVIDIA just shattered expectations yet again, reporting a record $68.1 billion in fourth-quarter revenue that cements its dominance in the AI revolution. As the chip giant's stock fluctuates in after-hours trading, investors are grappling with a critical question: does this staggering performance signal sustainable growth or an AI bubble nearing its peak? With revenue soaring 73% year-over-year and guidance pointing to another massive quarter ahead, the numbers tell a story of unprecedented demand for AI computing power.
How NVIDIA's $68.1 Billion Quarter Defied the Skeptics
The numbers speak for themselves: NVIDIA's fourth-quarter revenue of $68.1 billion for the period ending January 25, 2026, represents a 73% jump from the same time last year and a 20% rise from the prior quarter. This performance comfortably exceeded analysts' expectations of $65.7 billion, according to Moneycontrol. For the full fiscal year 2026, NVIDIA generated $215.9 billion in revenue, reflecting a 65% annual increase that demonstrates the relentless momentum behind global artificial intelligence expansion.
Profitability metrics remained equally impressive, with quarterly GAAP and non-GAAP gross margins at 75.0% and 75.2% respectively. Earnings per diluted share stood at $1.76 on a GAAP basis and $1.62 non-GAAP for the quarter. As CEO Jensen Huang stated in the earnings release: "Computing demand is growing exponentially—the agentic AI inflection point has arrived. Grace Blackwell with NVLink is the king of inference today—delivering an order-of-magnitude lower cost per token—and Vera Rubin will extend that leadership even further."
The Road to Record Earnings: NVIDIA's Fiscal 2026 Timeline
NVIDIA's journey to this record quarter has been marked by consistent acceleration throughout fiscal 2026. The company's year-over-year revenue growth of 73% for Q4 was its best performance for the fiscal year, compared to 62% in Q3, 56% in Q2, and 69% in Q1. This sequential acceleration contradicts concerns about an AI spending slowdown and instead points to expanding demand across cloud providers, enterprises, and government entities investing in AI infrastructure.
Key milestones throughout the year included the continued ramp of Blackwell architecture products and the announcement of Vera Rubin, next-generation AI platforms that management believes will drive $300 billion in product revenue through calendar 2026. According to Morningstar analysis, NVIDIA expects sequential growth in each of the four quarters of calendar 2026, supported by massive growth in artificial intelligence capital expenditure announced by large cloud computing companies.
Why NVIDIA's Guidance Changes the AI Investment Landscape
Perhaps the most significant aspect of NVIDIA's earnings report wasn't the record-breaking quarterly results, but the forward-looking guidance that suggests the AI boom is far from over. The company expects first-quarter fiscal 2027 revenue of about $78.0 billion, with a margin of error of 2%. This would represent 77% year-over-year growth and significantly exceeds FactSet consensus estimates of $72.9 billion.
Morningstar analysts note that "an 'AI bubble' does not appear imminent" based on this guidance, with management suggesting that its prior guidance of $300 billion of Blackwell and Rubin product revenue in calendar 2026 will be conservative. Importantly, the forecast does not include any data center computing revenue sold into China, despite prior approvals of H200 sales, leaving potential upside if geopolitical tensions ease.
According to the Seeking Alpha earnings call transcript, CFO Colette Kress emphasized that "enterprise adoption of agents is skyrocketing. Our customers are racing to invest in AI compute—the factories powering the AI industrial revolution and their future growth." This statement underscores the structural shift occurring across industries as companies move from AI experimentation to large-scale deployment.
Where NVIDIA Stands Now: Stock Reaction and Market Sentiment
Despite the blowout earnings and strong guidance, NVIDIA shares showed a muted reaction, rising as much as 3% in after-hours trading before giving up most gains. This tempered response reflects what Morningstar describes as "the even bigger expectations problem"—when a company consistently exceeds high expectations, even stellar results can fail to impress markets hungry for positive surprises.
Morningstar maintains its $240 fair value estimate for wide-moat NVIDIA, with shares trading at approximately $212 at the time of the earnings release. The firm rates NVIDIA with four stars (indicating undervaluation) and maintains a "Very High Uncertainty Rating" due to the unclear timing and magnitude of AI adoption in the decade ahead. Analysts noted one ongoing risk: NVIDIA hasn't yet signed its previously announced deal with OpenAI, though the company stated it "believes it is close" on signing the agreement.
What Happens Next: The $78 Billion Quarter and Beyond
Looking ahead, NVIDIA's trajectory appears to hinge on several key factors. The company's ability to meet its ambitious Q1 guidance of $78 billion will be closely watched as an indicator of whether AI infrastructure spending is maintaining its momentum. The launch and ramp of Vera Rubin architecture products in late 2026 could provide the next growth catalyst, potentially extending NVIDIA's technological leadership in AI inference.
Capital allocation remains a strength, with NVIDIA returning $41.1 billion to shareholders through share buybacks and dividends during fiscal 2026. As of the end of the quarter, $58.5 billion remained authorized for future repurchases, providing substantial support for the stock. The company confirmed it will issue a quarterly dividend of $0.01 per share on April 1, 2026, for shareholders on record as of March 11.
Perhaps most importantly for long-term investors, NVIDIA's position in the AI ecosystem appears more secure than ever. As CEO Jensen Huang noted during the earnings call, "Our customers are racing to invest in AI compute—the factories powering the AI industrial revolution and their future growth." This suggests that rather than being a cyclical bubble, AI infrastructure investment may represent a fundamental shift in how businesses allocate capital, similar to the cloud transformation of the previous decade.
Key Takeaways for Investors
For investors navigating the AI investment landscape, several critical points emerge from NVIDIA's earnings report. First, the AI infrastructure build-out continues to accelerate, with NVIDIA's guidance suggesting stronger growth ahead. Second, profitability remains robust despite massive revenue scale, with gross margins sustaining at elite levels above 75%. Third, capital return continues to be substantial, with over $41 billion returned to shareholders in the past year alone.
However, risks remain substantial. The "very high uncertainty" rating from Morningstar reflects legitimate concerns about the sustainability of AI spending levels and potential geopolitical disruptions. Additionally, NVIDIA's valuation already incorporates significant growth expectations, leaving limited room for disappointment. For investors considering NVIDIA stock, the key question may not be whether AI represents a transformational technology (it clearly does), but whether current valuations adequately reflect both the opportunities and risks in this rapidly evolving landscape.
As the AI revolution continues to unfold, NVIDIA's quarterly results serve as both a report card on current progress and a roadmap for future investment. With $68.1 billion in quarterly revenue becoming the new baseline and $78 billion on the horizon, the chip giant's journey appears far from complete—but the expectations bar has been raised to unprecedented heights.
