NVIDIA Corporation NVDA plans to announce fourth-quarter fiscal 2026 results after the market close on February 25.
The company expects revenue for the quarter to be $65 billion (+/-2%). The Zacks Consensus Estimate is pegged at $65.56 billion, representing a 66.7% increase from last year’s reported figure.
The Zacks Consensus Estimate for quarterly earnings has been revised upward by a penny over the past 60 days, to $1.52. This represents a year-over-year increase of 70.8% compared with earnings of 89 cents per share in the same period last year.
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The graphics chip maker’s earnings have topped the Zacks Consensus Estimate in three of the last four quarters and missed estimates in one quarter, with the average surprise rising 2.8%.
NVIDIA company price-eps-surprise | NVIDIA company price
Our proven model doesn’t conclusively predict that NVIDIA will beat earnings estimates this quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy), or #3 (Hold) increases the odds of an earnings beat. That’s not the case here. you can see The complete list of today’s Zacks #1 Rank stocks is here.
Although NVDA has a Zacks Rank #2, its Earnings ESP is 0.00%. You can discover the best stocks to buy or sell before they report with our Earnings ESP filter.
NVIDIA’s fourth-quarter revenue likely benefited from continued strength in its data center business. Amid the growing trend of hybrid working, the increasing adoption of cloud-based solutions is expected to increase the demand for its chips across the data center end market. Increasing demand for hyperscale and growing adoption in the inference market are likely to act as a catalyst in the upcoming reported quarter.
The data center end market business should benefit from growing demand for generative AI and large language models using NVIDIA Blackwell architecture-based GPUs. Strong demand for its chips from large cloud services and consumer internet companies is expected to help the unit post revenue growth in the to-be-reported quarter. The Zacks Consensus Estimate for fourth-quarter revenue for the data center end market is $58.72 billion.
NVIDIA’s fourth-quarter results are also likely to benefit from continued momentum in its gaming and professional visualization end markets. Performance in the gaming terminal market has improved year over year in eight of the past 10 quarters as channel partner inventory levels return to normal. The company also found strong demand for its gaming products in most regions. The gaming terminal market fourth-quarter revenue consensus is $4.26 billion.
Results from NVIDIA’s Professional Visualization segment also reflected a recovery, with revenue rising for nine consecutive quarters. This trend is likely to continue in the fourth quarter. The Zacks Consensus Estimate for fourth-quarter revenue in the professional visualization end market is $757.6 million.
The company’s automotive segment has shown improving trends over the past seven quarters. This positive trend is likely to continue in the fiscal fourth quarter due to increased investment in autonomous driving and artificial intelligence cockpit solutions. The automotive end market fourth-quarter revenue consensus is $662.7 million.
Nvidia’s stock price has remained volatile over the past year. NVDA stock has gained 39.8% over the past year, outpacing the Zacks Semiconductor – General industry’s gain of 37.3%. However, the stock has lagged major semiconductor stocks, including AMD Ultramicro Semiconductor, Intel international trade center and Broadcom AVGO. Shares of Advanced Micro Devices, Intel and Broadcom soared 83.5%, 79.4% and 52.7% respectively.
Now, let’s look at the value NVIDIA offers investors at current levels. NVIDIA’s price-to-earnings ratio (P/E) for the next 12 months is 25.38 times, while the industry’s P/E ratio is 28.1 times, indicating a more attractive valuation.
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Compared to other chip giants, NVDA trades at a lower price-to-earnings ratio relative to Intel, Advanced Micro Devices and Broadcom. Currently, the forward P/E ratios of Intel, Advanced Micro Devices and Broadcom are 81.97 times, 28.35 times and 29.29 times respectively.
NVIDIA’s revenue growth over the past year has been driven largely by strong demand for chips needed to develop generative AI models. NVIDIA dominates the market for generative AI chips, which are proving useful across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy and utilities, and video game development.
The growing need to modernize workflows across industries is expected to drive the demand for generative AI applications. According to the latest report from Fortune Business Insights, the global generative artificial intelligence market size is expected to reach US$1,260.15 billion by 2034. The market compound annual growth rate is expected to reach 29.3% from 2026 to 2034.
The complexity of generative AI requires vast amounts of knowledge and massive computing power. This means businesses will need to significantly upgrade their network infrastructure. NVIDIA’s AI chips, including the A100, H100, B100, B200, B300, GB200 and GB300, are the first choice for building and running these powerful AI applications, making the company a leader in the field. As the generative AI revolution unfolds, we expect NVIDIA’s advanced chips to drive significant revenue and market share growth.
As a leader in the semiconductor industry, NVIDIA benefits from its dominance in GPUs and strategic expansion into artificial intelligence, data centers and autonomous vehicles. The company’s strong product portfolio, leadership in artificial intelligence and relentless innovation provide a compelling investment opportunity. A lower valuation multiple than the industry also suggests that NVIDIA is a good investment choice right now.
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