All eyes are on Nvidia as it prepares to report earnings on February 25, a report that many investors see as a key test for the strength of the global artificial intelligence boom. The results for the quarter ended January 25, 2026, are expected to show whether demand for AI chips is still strong and whether companies are continuing to spend heavily on AI infrastructure.
Expectations are already high. Nvidia is expected to report strong growth, but analysts say that simply beating estimates may not be enough. Investors want clear signs that demand will remain strong in the coming years.
Margins will show how strong Nvidia’s position is
An important area to watch is Nvidia’s profit margins, which show how much the company earns from its sales.
Nvidia has had very strong margins in recent years, helped by its leadership in AI chips. In the nine months ending October 27, 2024, the company reported operating gross margins above 76%. This fell to 69.5% during the same period in 2025 before improving to 73.6% in the latest quarter.
Management has said it wants to finish fiscal 2026 with margins in the mid-70% range. Investors will be watching to see whether this target has been achieved and what the company expects for the coming year.
Margins also shows Nvidia’s pricing power. New competition from companies designing their own chips has raised questions about whether Nvidia can maintain its strong position. The company’s CUDA software system is still seen as a major advantage and has helped Nvidia keep about 80–85% share of the AI chip market.
Revenue numbers and guidance will matter the most
Nvidia had earlier guided for about $65 billion in fourth-quarter revenue, so investors will first look at whether the company meets or beats this number. Goldman Sachs expects revenue to reach $67.3 billion, about $2 billion above consensus estimates, and earnings per share to come in 5% higher than expected.
“The stock appears to be pricing in upside to Nvidia’s CY26 estimates already,” the analysts wrote. “Outperformance from here will hinge on revenue visibility into CY27.”
This means investors are less focused on past performance and more interested in what Nvidia expects for the next year. Strong guidance for fiscal 2027 could push the stock higher, but cautious forecasts may disappoint investors.
Data center demand will show the strength of AI growth
Most of Nvidia’s revenue now comes from its data center business, which supplies powerful chips and servers used by cloud companies to run AI models. Because of this, the data center division is seen as the best indicator of overall AI demand.
Estimates suggest Nvidia’s total fourth-quarter revenue could be around $57 billion, with the data center business expected to contribute roughly $60 billion. Forecasts for the segment range between about $56.9 billion and $62.6 billion.
Last quarter, Nvidia CFO Colette Kress said the company sees a $500 billion opportunity between last quarter and the end of 2026 for Blackwell and its next GPU model, called Rubin, and that future aggregate demand will likely increase. Investors will want to see whether management still sounds confident about this opportunity.
Spending by large cloud companies is a major reason for this growth. Goldman Sachs estimates that hyperscaler capital spending could rise to more than $527 billion in 2025, up from $394 billion earlier.
Blackwell chips will be closely watched
Nvidia’s new Blackwell chips are expected to play a big role in future growth, so investors will be looking closely at how these chips are being adopted.
Estimates for Blackwell revenue vary, showing that analysts are still unsure about the pace of growth. Fourth-quarter forecasts range from $7.1 billion to $53.8 billion, with an average estimate of about $33.5 billion. Full-year projections suggest Blackwell revenue could grow sharply from around $7.1 billion last year to nearly $93.7 billion this year.
Investors want to know if production is running smoothly and whether customers are buying the new chips as expected. They will also be listening for early updates on the next-generation Rubin chips, which are expected to follow Blackwell. A smooth transition between chip generations is important for keeping Nvidia’s growth on track.
China remains an important unknown
Nvidia’s business in China is another major issue investors will be watching. US export restrictions limited Nvidia’s chip sales in China for much of 2025, reducing revenue from a market that used to be very important. There are signs that sales of H200 chips could resume, but approvals are still under review.
Last August, Huang said the Chinese market would have been a $50 billion annual opportunity for Nvidia last year, had it been fully open. He also said he could see this opportunity growing 50% per year. Nvidia is not including any China revenue in its fourth-quarter guidance, so any positive developments could provide a boost.
Long-term outlook could drive the stock reaction
The biggest factor for investors may be Nvidia’s long-term outlook rather than just the quarterly numbers. Analysts say expectations are already high, so the company needs to show that AI demand will continue to grow in the coming years. Investors want to know whether spending on AI infrastructure will stay strong and whether Nvidia can keep its leading position. If Nvidia provides strong signals about future growth, the results could support the view that the AI boom still has a long way to go. If the outlook is less certain, the stock could face pressure regardless of strong results.
Meanwhile, US stocks rose higher on Wednesday as investors waited for a major update from Nvidia. The S&P 500 gained 0.5% in early trading, as markets became calmer after the sharp ups and downs earlier this week, when investors were trying to identify winners and losers in the artificial-intelligence boom.
The Dow Jones Industrial Average rose 163 points, while the Nasdaq Composite climbed 0.8%. Nvidia, whose chips are at the heart of the AI boom, is currently the most valuable company in the U.S. stock market.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.