Nvidia (NVDA 1.32%) remains the most talked-about stock on the market, even though its performance has been underwhelming recently. It's roughly flat year to date, but it's likely to make a big move after it reports fiscal 2026 fourth quarter (ended Jan. 25) earnings on Wednesday, Feb. 25, although it's unclear in which direction.
Here's what investors can expect, and what I'll be watching for in the results.
Beating Wall Street's expectations
Nvidia has a history of beating Wall Street's expectations, and although they're high for the fourth quarter, I suspect that will happen again. The Wall Street consensus for revenue is $65.6 billion, up from $39.3 billion last year, or a 65% increase (in line with internal guidance), and $1.52 in earnings per share (EPS), up from $0.89 last year.
Image source: Nvidia.
Nvidia has new products coming
The other important updates are likely to center around demand for the company's new products. Demand has been explosive as the hyperscalers keep building out their artificial intelligence (AI) platforms. These platforms require Nvidia's graphics processing units (GPUs) to support the incredible amounts of data they need to process for high-level AI applications. Even more, they're invested in Nvidia's ecosystems, which include its vertically integrated systems like the CUDA computing interface.
As of the end of the third quarter, CEO Jensen Huang said that the company had a path toward $500 billion in revenue from its Blackwell and Rubin chip lines through the end of 2026, and it envisions $3 trillion to $4 trillion in AI infrastructure spend through 2030, with its products in high demand.
NASDAQ: NVDA
Key Data Points
Its chips are still sold out, and all of its lines, including the older Ampere and Hopper lines, are fully utilized. While Nvidia is just getting started with the Vera Rubin line, it may already announce the next and more powerful architecture, which will probably be released in 2027.
It's all about the future
Nvidia stock looks fairly expensive, trading at 24 times trailing-12-month sales and 46 times earnings. However, it deserves a premium for its highly sought-after products as well as its earnings growth -- its forward PEG ratio, or price/earnings-to-growth multiple, is only 0.15, implying that it could be undervalued even at the current price.
That's where outlook becomes important. If Nvidia can keep up the kind of earnings growth it's currently demonstrating, it can carry a higher valuation, and the stock is likely to jump after earnings. If there's any sign of slowing down, the market is likely to send the stock down, even if it delivers an otherwise flawless report.
With the market on notice for any sign of imperfection, it might be difficult for Nvidia's update to be satisfactory. However, given its past performance and the insatiable demand from clients, it could certainly happen this week.
