Feb. 25 Will Be a Huge Day for Nvidia. 3 Important Things to Watch for in the Company’s Upcoming Earnings.

After the close on Wednesday, February 25, the artificial intelligence (AI) chip giant NVIDIA (NASDAQ: NVDA) Nvidia will announce fourth-quarter and full-year fiscal 2026 earnings, followed by a conference call with CEO Jensen Huang, other members of Nvidia’s management team, and Wall Street analysts. These events are nothing short of cinematic for market watchers, who have watched Nvidia drive stocks higher in recent years.

Earnings reports are always a big event for Nvidia, as investors view them as a yardstick for the overall artificial intelligence market. Here are three important things to note.

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On Nvidia’s last earnings call, the company projected total fourth-quarter revenue of $65 billion, so hitting or exceeding that number is always at the forefront of investors’ minds, as is guidance for the next quarter.

Nvidia generates the majority of its revenue from its data center segment, which provides critical hardware, including graphics processing units (GPUs) and servers, to the data centers that hyperscale enterprises rely on to run artificial intelligence models and solutions.

Investors will be watching factors within the sector to gauge broader AI demand. For example, what’s the sentiment and demand for Nvidia’s most powerful GPU (Blackwell), and how effective is the new technology in training AI models? Will the extraordinary demand that management has historically claimed be reflected in the numbers?

Last quarter, Nvidia Chief Financial Officer Colette Kress said that Nvidia expected Blackwell and its next-generation GPU model Rubin to bring a $500 billion opportunity from last quarter to the end of 2026, and that total demand may increase in the future. Investors will be watching to see whether this comes true, and how management phrases and gets excited about the potential opportunity.

Pricing power is important to investors because it indicates a company’s competitive position in a given market. Nvidia’s dominance in chips and artificial intelligence hardware brings incredible profits. However, other companies, including hyperscalers, are designing their own chips, and some investors are worried about Nvidia’s competitive position.

For the nine months ended October 27, 2024, Nvidia’s operating gross margin exceeded 76%. But over the same period in 2025, that number dropped to 69.5% as the company dealt with higher input costs. However, Nvidia has shown improvement recently, with operating gross margin reaching 73.6% at the end of last quarter. Management aims to end fiscal 2026 in the mid-70s.

Of course, investors will be watching to see whether the company achieves this goal and management’s guidance for margins in the next fiscal year.

Another important aspect of Nvidia’s business that investors are concerned about is its operations in China. The company has been unable to sell older versions of its chips to Chinese companies for much of 2025 due to U.S. government restrictions. Huang spent a lot of time lobbying in Washington, D.C., and seemed to be making progress, though the message seemed to keep changing.

In December, Huang appeared to reach a deal with the Trump administration that would allow the company to sell its H200 chips in China, where demand has been high in the past. The U.S. government will receive a quarter of the sales.

But as of early February, the government was still conducting a national security review of Nvidia’s transactions and customers in China. Meanwhile, Chinese regulators are also expected to impose some conditions on the sale if U.S. approval is given.

In August last year, Huang Renxun said that if the Chinese market was fully opened, the Chinese market would bring an annual opportunity of US$50 billion to Nvidia last year. He also said he expects the opportunity to grow 50% annually. Nvidia currently doesn’t assume any revenue from China in its fiscal 2026 fourth-quarter guidance, so it’s easy to see how big Nvidia’s revenue could be if the company is able to reopen operations in China.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has a position and recommends Nvidia. The Motley Fool has a disclosure policy.

February 25th will be a big day for Nvidia. 3 important things to watch in the company’s upcoming earnings. Originally posted by The Motley Fool