Investors in artificial intelligence (AI) stocks have closely followed one stock quarter after quarter: Nvidia (NVDA 1.53%). That's because the company has built an AI chip empire and, over the past few years, has proven its ability to stay on top. Nvidia has been generating record earnings thanks to this market position, and as investors piled into the stock, it even became the world's biggest company -- market capitalization roared past $4 trillion last year.
So, it's not surprising that investors watch for any news from Nvidia that may signal what's to come. Analysts predict the AI market will reach into the trillions of dollars in just a few years, and companies from Alphabet to Amazon recently announced increased spending on AI infrastructure. Still, some investors worry about the risk that spending may outpace demand -- and that certain stocks may not be able to live up to expectations, especially considering their valuations.
All of this means investors are likely to focus on something happening on Feb. 25. Will Nvidia stock soar after that moment? The evidence is piling up, and here's what it shows.
Image source: Getty Images.
Nvidia's AI leadership
Before diving in, let's take a quick look at the road Nvidia has taken so far. The company, once known mainly for serving the video gaming market, placed an early bet on AI: Well before the boom, Nvidia recognized the growth potential and decided to design its graphics processing units (GPUs) -- or chips -- to suit this technology. It was a wise move, as Nvidia built a solid reputation, developed expertise, and gained leadership. This set the stage for what we're seeing today: quarter after quarter of spectacular earnings growth and outstanding stock performance.
Nvidia's revenue has climbed in the double and triple digits, and in the last fiscal year reached more than $130 billion. Meanwhile, the stock has advanced 1,200% over five years.
NASDAQ: NVDA
Key Data Points
And this brings me to the event set for Feb. 25. That's Nvidia's fiscal 2026 fourth-quarter and full-year earnings report. Wall Street predicts Nvidia will report $65.55 billion in quarterly revenue, but Goldman Sachs expects the company to surpass that level by almost $2 billion. Nvidia has a track record of beating expectations as demand for its chips and systems has surged in recent years, even surpassing supply at certain points.
A clue from Colette Kress
On top of this, recent clues from Nvidia and other companies offer us reason for optimism. For example, Nvidia finance chief Colette Kress said early this year that demand continues to increase, with AI product revenue from last year through the end of 2026 set to surpass an earlier $500 billion forecast. And cloud companies that offer Nvidia chips to customers for their AI workloads have also spoken of soaring demand, prompting them to invest more in infrastructure.
Of course, it's always possible that Nvidia will disappoint investors, but most of the evidence supports the idea of a strong earnings report ahead. Now, let's consider if this will translate into stock performance.
In recent weeks, other AI players have reported AI demand and delivered significant growth -- from the cloud players I mentioned above to fellow chip designer, Advanced Micro Devices. In many cases, though, these players have seen their stock prices fall immediately after their very positive reports. For example, AMD dropped 17% in one trading session, and Amazon slipped 5.4%.
Nvidia's past earnings reports
And a look back at Nvidia's past 11 earnings reports shows that in the one-week period following these reports, the stock fell six times. Nvidia's track record suggests that, if history is right, the stock is slightly more likely to decline than to gain.
So, the evidence that's been piling up suggests that even if Nvidia delivers a fantastic earnings report, the stock may not roar higher. But here's some good news for Nvidia shareholders: Though evidence doesn't support the idea of a gain, this only concerns the short term.
Over the long term, Nvidia's leadership in the AI market, its focus on innovation, and the overall expectations for AI growth and demand paint a very bright picture. Nvidia's earnings could continue to roar higher quarter after quarter -- and that may lead to explosive stock performance over the long run.
