--- title: "AI demand remains strong! NVIDIA's Q4 revenue increased by 73%, Q1 guidance \"exploded\" to a record high, Jensen Huang raised the revenue forecast to 500 billion | Earnings report insights" description: "In Q4, NVIDIA's total revenue and data center revenue both hit record highs; thanks to the ramp-up of Blackwell, gross margin exceeded 75%, reaching a year-and-a-half high; data center revenue acceler" type: "news" locale: "en" url: "https://longbridge.com/en/news/276955356.md" published_at: "2026-02-26T00:06:59.000Z" --- # AI demand remains strong! NVIDIA's Q4 revenue increased by 73%, Q1 guidance "exploded" to a record high, Jensen Huang raised the revenue forecast to 500 billion | Earnings report insights > In Q4, NVIDIA's total revenue and data center revenue both hit record highs; thanks to the ramp-up of Blackwell, gross margin exceeded 75%, reaching a year-and-a-half high; data center revenue accelerated to a 75% year-on-year growth, exceeding expectations, with network revenue increasing by over 260%; gaming revenue fell short of expectations, declining 13% quarter-on-quarter due to channel inventory impacts. NVIDIA expects supply constraints to become a headwind for business in Q1 and beyond; the midpoint of Q1 revenue guidance is 4% higher than the most optimistic expectations from buyers, with a nearly 77% year-on-year increase, excluding revenue from data center computing in China; starting from Q1, non-GAAP will include stock-based compensation. Jensen Huang stated that the surge in computing demand and the soaring of agent applications will exceed the previously set target of $500 billion in chip revenue, while the current space data center economy is still "barren." NVIDIA's stock rose nearly 4% in after-hours trading Amid a series of product launches by Anthropic and the "end-of-day report" from Citrini that intensified investor panic, the artificial intelligence (AI) boom has withstood direct scrutiny, with NVIDIA delivering a "blockbuster" performance that proves the demand generated by AI remains strong. On Wednesday, Eastern Time, NVIDIA announced that for its fourth fiscal quarter of 2026 (ending January 31, 2026), revenue reached a record $68.1 billion, a year-on-year increase of about 70%. The core data center business, which contributes over 90% of revenue, also set a new quarterly revenue record, exceeding analyst expectations by more than 3%. NVIDIA's earnings for the fourth quarter were equally strong. On a non-GAAP basis, the adjusted earnings per share (EPS) grew by over 80% year-on-year, about 5.9% higher than analyst expectations, and the gross margin also exceeded expectations, climbing to 75.2%, the highest in a year and a half. What further encouraged investors was NVIDIA's guidance for the first fiscal quarter of 2027 (Q1), which was also stronger than expected. Revenue is expected to reach a new high, with the midpoint of the guidance range 7.1% higher than the analyst consensus, and even 4% above the optimistic expectations from buyers, with a year-on-year growth rate accelerating to nearly 77% compared to the fourth quarter. NVIDIA noted that this guidance does not include data center computing revenue from the Chinese market. During the earnings call on Wednesday, NVIDIA CEO Jensen Huang also raised the previously set revenue expectations for chips, stating that they will exceed the $500 billion target. Supply will meet demand through next year. At the GTC conference last October, Huang revealed that NVIDIA had secured chip orders worth $500 billion for the calendar years 2025 and 2026, including the next-generation Rubin chips that will begin mass production this year. Huang stated that customers are competing to invest in AI computing. The demand for computing is growing rapidly. The application of agents by enterprises is soaring. He mentioned the "space data center," stating that the current space data center economy is still "barren," but the situation will change over time. After the earnings report was released, NVIDIA's stock price, which had already risen over 1% on Wednesday, surged in after-hours trading, with the after-hours gains quickly expanding to nearly 4%. Analysts believe the key to the market's positive response lies in the data center revenue and total revenue both exceeding expectations; the gross margin continues to improve as production ramps up for the new generation Blackwell chips, and the guidance for this fiscal quarter is stronger even without accounting for some revenue from the Chinese market, reinforcing the narrative of resilience in AI computing demand. ## Q4 Revenue Hits Record High, Gross Margin Reaches 18-Month High In the fourth quarter, NVIDIA's revenue grew by 73% year-on-year to $68.127 billion, significantly higher than the previous quarter's growth rate of 62%, and exceeding NVIDIA's own guidance midpoint of $65 billion. Analysts had expected revenue of $65.91 billion, representing a year-on-year growth of about 68%. For the entire fiscal year, NVIDIA's revenue also set a record high at $215.938 billion, a 65% increase compared to the previous year. Gross margin was another highlight in the fourth quarter: the non-GAAP gross margin was 75.2%, an increase of 1.7 percentage points year-on-year and 1.6 percentage points quarter-on-quarter, reaching a quarterly high since the second fiscal quarter of 2025, and higher than analysts' expectations of 75.0%. NVIDIA's Chief Financial Officer (CFO) Colette Kress explained that the year-on-year improvement in gross margin was due to "a reduction in inventory provisions," while the quarter-on-quarter improvement was related to "better product and cost structures" brought about by the continued ramp-up of Blackwell chips. However, for the entire fiscal year 2026, the non-GAAP gross margin is declining, falling from 75.5% in the previous fiscal year to 71.3%, a year-on-year decrease of 4.2 percentage points, indicating that during the platform transition and supply ramp-up phase, annual profit margins will still be affected by structural disruptions. ## Data Center: Stable Growth in Computing Power, Accelerated Networking Transition In the fourth quarter, NVIDIA's data center business recorded revenue of $62.314 billion, a year-on-year increase of 75%, with growth exceeding the previous quarter's year-on-year growth of 66%. Analysts expected a year-on-year increase of nearly 70% to $60.36 billion. Within the data center segment, NVIDIA provided two noteworthy figures this quarter: - Data center computing revenue was $51.334 billion, a year-on-year increase of 58%, slightly higher than the 56% growth in the third quarter. - Data center networking revenue was $10.980 billion, a year-on-year increase of 263%, significantly exceeding the 162% growth in the third quarter. NVIDIA attributed the surge in networking revenue to the "launch and continued ramp-up" of the NVLink compute fabric for the GB200 and GB300 systems, while Ethernet and InfiniBand platforms continued to grow. In other words, the market should not only focus on the shipment pace of GPUs but also recognize that NVIDIA is packaging "computing power, interconnect, and systems" into a more irreplaceable overall solution, with the high growth rate in networking revenue being a financial reflection of this strategy. Regarding customer structure, the company disclosed that in the fourth quarter, revenue from hyperscale cloud providers accounted for slightly over 50% of total data center revenue, remaining the largest customer category, but the revenue growth for the quarter came more from other data center customers, indicating a diversification of revenue sources and a marginal alleviation of concentration risk## Blackwell Drives Game Demand, Short-term Supply and Channel Disruptions In the fourth quarter, NVIDIA's gaming business revenue reached $3.727 billion, a year-on-year increase of 47%, while analysts expected $4.01 billion, with a 30% year-on-year growth in the previous quarter. The gaming business saw accelerated year-on-year growth in the fourth quarter, which NVIDIA attributed mainly to strong demand from Blackwell. However, the business's revenue declined by 13% quarter-on-quarter due to "natural inventory reduction in the channel after the holiday peak season." It is worth noting that NVIDIA clearly indicated that supply constraints are expected to become a headwind for the gaming business starting in the first quarter and beyond. In the fourth quarter, professional visualization revenue was $1.321 billion, a year-on-year increase of 159%, while analysts expected $770.7 million, with a 56% year-on-year growth in the previous quarter. Professional visualization also achieved more than double year-on-year revenue growth and a 74% quarter-on-quarter increase, driven by Blackwell, becoming one of the most notable incremental businesses aside from the data center. However, the scale of this business is far less than that of the data center. ## Q1 Revenue Guidance Median Expected to Increase Nearly 77% Year-on-Year Excluding China Data Center Revenue In terms of performance guidance, NVIDIA announced that Q1 revenue is expected to be $78 billion, with a fluctuation of 2%, or between $76.44 billion and $79.56 billion. This range indicates that NVIDIA's revenue for this fiscal quarter will set a new record, surpassing the previous high in the fourth quarter. Calculating based on the median of the revenue guidance, it means NVIDIA expects Q1 revenue to grow by 76.9% year-on-year, further accelerating from the 73% growth rate in the fourth quarter. NVIDIA's revenue guidance median not only exceeds the analyst expected median of $72.78 billion but also surpasses the optimistic expectations of buyers, which range from $74 billion to $75 billion. NVIDIA's Q1 gross margin is expected to align with Wall Street buyers' optimistic expectations, likely reaching a new high since the second fiscal quarter of 2025. The adjusted non-GAAP gross margin for Q1 is expected to be 75%, with a fluctuation of 50 basis points, or between 74.5% and 75.5%, with buyers' optimistic expectations at 75% and sellers' consensus expectations at 74.7%. ## Non-GAAP to Include Stock-Based Compensation Starting Q1 Along with the earnings report, NVIDIA announced that starting in Q1, the financial metrics under non-GAAP will no longer exclude stock-based compensation (SBC). Due to this adjustment, NVIDIA expects the impact on Q1 non-GAAP operating expenses to be approximately $1.9 billion. This change will directly alter the "customary metrics" that the market has long used to compare profit margins and expense ratios, potentially leading to a recalibration of consensus expectation models in the short term, and will allow investors to see more clearly the true costs NVIDIA incurs to maintain talent and research and development leadership ### Related Stocks - [NVDA.US - NVIDIA](https://longbridge.com/en/quote/NVDA.US.md) - [NVDD.US - Direxion Daily NVDA Bear 1X ETF](https://longbridge.com/en/quote/NVDD.US.md) - [NVDY.US - YieldMax NVDA Option Income Strategy ETF](https://longbridge.com/en/quote/NVDY.US.md) - [NVD.US - GraniteShares 2x Short NVDA Daily ETF](https://longbridge.com/en/quote/NVD.US.md) - [SOXL.US - Direxion Semicon Bull 3X](https://longbridge.com/en/quote/SOXL.US.md) - [SMH.US - VanEck Semiconductor ETF](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US - iShares Semiconductor ETF](https://longbridge.com/en/quote/SOXX.US.md) - [XLK.US - Spdr Select Tech](https://longbridge.com/en/quote/XLK.US.md) - [NVDS.US - AXS 1.5X NVDA Bear Daily ETF](https://longbridge.com/en/quote/NVDS.US.md) - [NVDX.US - T-Rex 2X Long NVIDIA Daily Target ETF](https://longbridge.com/en/quote/NVDX.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | Nvidia keeps the AI party alive with a booming quarter and even better outlook | Nvidia reported impressive quarterly results, with a 73% year-over-year revenue increase to $68.13 billion, surpassing e | [Link](https://longbridge.com/en/news/276963204.md) | | AI, tariffs, Taiwan, and beyond: What prediction markets expect from Nvidia’s earnings call | Nvidia (NVDA) is set to report earnings, with investors keenly anticipating insights from the earnings call. 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