Nvidia's record quarter fails to excite Wall Street

Yesterday 12:50

By: Dakir Madiha

Nvidia's record quarter fails to excite Wall Street

Nvidia reported another blockbuster set of quarterly results, yet investors responded with striking restraint as the stock barely moved despite a clean beat on both earnings and guidance. The muted reaction underlined how fully the company’s dominance in artificial intelligence hardware is already embedded in its valuation and how the bar for positive surprises has shifted higher. Analysts noted that a performance which once would have ignited a powerful rally now only confirms expectations, rather than resetting them.

The chipmaker posted record revenue of about 68 billion dollars, a year‑on‑year increase in excess of 70 percent, with net income nearly doubling to roughly 43 billion dollars as demand for data center products remained the main growth engine. Sales of AI infrastructure chips and systems again accounted for the overwhelming majority of turnover, reinforcing Nvidia’s central role in powering large language models and other compute‑intensive workloads. Earnings per share comfortably surpassed Wall Street forecasts, while management issued guidance for the current quarter pointing to revenue of around 78 billion dollars, well ahead of consensus estimates and signaling that the investment cycle in AI remains robust. Chief executive Jensen Huang described the current phase as a new industrial era driven by agentic AI, arguing that compute capacity now tracks directly to revenue opportunities for customers.

Despite that, several major banks highlighted that debate around the stock has moved beyond quarterly beats toward whether Nvidia can preserve its lead as rivals ramp up their own AI offerings. Analysts at Morgan Stanley and Bank of America pointed to persistent questions over the durability of AI infrastructure spending, the possibility of slower growth in coming years, and the risk that hyperscale customers diversify more aggressively across suppliers. The slight disappointment around certain sub‑segments of the data center business, even as networking and systems offset any softness, also sharpened focus on competitive threats from AMD and in‑house accelerators such as Google’s tensor processing units. For many portfolio managers, those longer‑term uncertainties appear to weigh more heavily than any single quarter’s numbers.

Competition is already intensifying across the ecosystem. Meta recently outlined a large multiyear deployment plan with AMD that could eventually amount to several gigawatts of AI compute, underscoring that even Nvidia’s biggest customers are no longer relying on a single vendor for their accelerator roadmaps. Google is scaling its internal AI chip programs and exploring broader use of its TPUs with external partners, adding another layer of pressure. At the same time, Nvidia is pushing forward with its own next‑generation platform, Vera Rubin, and has started shipping early samples to customers while preparing for broader production in the second half of 2026. Management insists that the new architecture will strengthen the company’s grip on high‑end AI workloads by offering more performance, memory bandwidth, and tightly integrated networking at the rack scale.

Investors are now looking to Nvidia’s upcoming GTC conference for clearer signals about how the company plans to sustain its momentum in such a crowded field. Market participants expect detailed updates on Vera Rubin, Blackwell’s longer‑term positioning, and the pace at which cloud providers and enterprises are likely to expand their AI data center footprints over the next several years. Strategists say that without fresh visibility into multi‑year demand, even exceptional quarters may not be enough to drive the next leg higher for a stock already trading at a premium to the broader semiconductor sector. For now, the latest numbers confirm Nvidia’s status as the linchpin of the AI boom, but the flat share price suggests that proof of continued leadership, not just record results, is what the market wants to see next.