Nvidia’s solid Q4, upbeat guidance, quashes fears of AI slowdown but China overhang remains

Nvidia, the world’s most valuable company, reported stronger-than-expected results for its fiscal fourth quarter on Wednesday, powered by a 75% surge in revenue from its core data centre business. Shares of the company rose following the earnings but later pared gains to end just over a percent higher.

Total revenue climbed 73% from $39.3 billion a year earlier. Nvidia now derives more than 91% of its sales from its data centre segment, which houses its market-leading artificial intelligence chips. Data centre revenue came in at $62.3 billion, exceeding expectations of $60.69 billion, according to StreetAccount.

Net income nearly doubled to $43 billion, or $1.76 per share, compared with $22.1 billion, or 89 cents per share, in the same quarter a year ago, the company said in a press release.

Guidance also topped expectations. Nvidia forecast fiscal first-quarter revenue of $78 billion, plus or minus 2%, compared with analysts’ estimate of $72.6 billion. The company clarified that its outlook does not assume any data centre revenue from China.

The chipmaker said it has secured sufficient chip inventory and manufacturing capacity to meet demand over the next several quarters, addressing concerns that supply constraints at contract manufacturer TSMC could hinder growth. However, the company noted that the shortage will impact its gaming business.

Chief Financial Officer Colette Kress said on a conference call that Nvidia expects sales growth to surpass the $500 billion revenue pipeline for 2026 disclosed in October. She did not provide a specific timeline but said the company anticipates growth in each quarter of calendar 2026.

“Our customers are racing to invest in AI compute, the factories powering the AI industrial revolution and their future growth,” CEO Jensen Huang said in a statement.

The fourth-quarter results are good news for AI investors, who are looking to Nvidia's performance to gauge whether the hundreds of billions of dollars that Big Tech is pouring into data centre infrastructure are paying off.

"It's clear from Nvidia's latest numbers and their forecast that concerns about an AI slowdown simply are not showing up yet," Bob O'Donnell, chief analyst at TECHnalysis Research, told Reuters. "Interestingly, the data centre revenues are diversifying across more than just the biggest hyperscalers. This suggests there is still growth opportunity in more places, highlighting the ever-expanding interest in AI compute."

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No China revenue yet

Nvidia said its current-quarter forecast does not factor in any expected revenue from sales of its data centre chips to China. However, the company disclosed that it received licences this month from the US government to ship “small amounts” of its H200 chips to customers in China.

Meanwhile, AMD has reinstated AI chip sales to China in its forecast for the current quarter after receiving licences to ship certain modified processors to the country.

Further, there are emerging signs of pressure on Nvidia’s dominance in AI chips. Rival AMD is preparing to launch a new flagship AI server later this year and has secured deals with some of Nvidia’s key customers, including Meta Platforms. At the same time, Alphabet’s Google has emerged as a strong competitor, striking a deal to supply its in-house chips, known as TPUs, to Claude chatbot creator Anthropic. Media reports also suggest Google is in talks to supply Meta.

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