Nvidia (NVDA) delivered a resounding answer to skeptics on Wednesday, posting fiscal fourth-quarter earnings that smashed expectations and provided fresh evidence that the artificial intelligence boom is not only alive but accelerating.
The AI chip giant reported revenue of $68.1 billion for the quarter ended Jan. 25, up an eye-popping 73% year over year and handily beating the analyst consensus of $66.2 billion. Even more striking, the growth rate accelerated from the 62% posted in the prior quarter, signaling that demand for Nvidia’s chips shows no signs of slowing.
Adjusted earnings per share came in at $1.62, soaring 82% from a year ago and topping expectations for $1.54. The company’s gross margin remained best-in-class at 75%. Nvidia’s cash flow machine is also running at full throttle. The company generated $34.9 billion in free cash flow during the quarter, a staggering 125% increase from the $15.5 billion reported in the same period last year.
Investors signaled their approval immediately, sending the stock up more than 2% in after-hours trading.
Nvidia’s data center business, the crown jewel of its AI empire, delivered another record performance. Segment revenue hit $62.3 billion, surging 75% year over year and 22% sequentially. The unit, which includes chips for high-performance computing, cloud computing, and AI training, is widely viewed as a bellwether for AI adoption trends.
The gaming segment, once Nvidia’s bread and butter, also turned in a solid quarter with revenue of $3.7 billion, up 47% year over year. However, CFO Colette Kress signaled potential headwinds ahead, noting on the earnings call, “We expect supply constraints to be a headwind to gaming in the first quarter of fiscal 2027 and beyond.”
CEO Jensen Huang left no doubt about what’s driving the company’s historic run. In a statement, he highlighted the accelerating shift toward next-generation AI applications.
“Computing demand is growing exponentially — the agentic AI inflection point has arrived,” Huang said. He touted the company’s technological edge, declaring that the Grace Blackwell platform with NVLink “is the king of inference today — delivering an order-of-magnitude lower cost per token.” He added that the upcoming Vera Rubin architecture “will extend that leadership even further.”
Addressing concerns about whether enterprise AI spending might cool, Huang struck an emphatic tone: “Enterprise adoption of agents is skyrocketing. Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth.”
Perhaps the most potent rebuttal to AI bears came in Nvidia’s outlook. For the first quarter of fiscal 2027, the company forecast revenue of $78 billion, excluding revenue from its China data center business. That would represent year-over-year growth of 77% — an acceleration from the current quarter’s 73% clip. The company also guided for gross margins to remain steady around 74.9%.
The guidance directly counters narratives that Nvidia’s growth would inevitably moderate as its revenue base expands. Instead, the company signaled that demand for AI infrastructure remains insatiable, from cloud giants to enterprise customers and from model training to inference workloads.
Despite the stock’s meteoric rise, Nvidia shares trade at less than 25 times forward earnings — a multiple that looks undemanding for a company growing revenue by more than 70% and more than doubling free cash flow.
With its impenetrable CUDA moat and a product roadmap featuring Blackwell and Vera Rubin, Nvidia appears well-positioned to maintain its dominance in the AI chip market. As Huang put it, customers are building “AI factories” — and Nvidia remains the essential equipment provider.
If Wednesday’s report is any guide, the AI gold rush is far from over. And the shovel seller is just getting started.
