NVIDIA to Post Q4 Earnings: Buy, Hold, or Take Profits?

NVIDIA Corporation NVDA is all set to report its much-awaited fiscal 2026 fourth-quarter (ended Jan. 25) earnings after the closing bell on Feb. 25. With rising artificial intelligence (AI)-driven bubble concerns, this report could prove crucial, making it essential for investors to consider strategic actions ahead of the announcement. Let’s examine the positions they might consider before the earnings reveal. 

NVIDIA Set for Strong Q4, but History Suggests Patience  

On a quarter-over-quarter basis, NVIDIA has consistently delivered strong earnings, and Wall Street analysts expect the fiscal fourth-quarter 2026 results to follow the same trend. NVIDIA’s management has projected fourth-quarter fiscal 2026 revenues around $65 billion, plus or minus 2%, which would exceed the $57 billion reported in the third quarter of fiscal 2026, according to investor.nvidia.com.  

The company’s profitability is also anticipated to strengthen, with the Zacks Consensus Estimate projecting earnings per share (EPS) of $1.52, marking a 70.9% year-over-year increase. 

Earnings growth should, in theory, be the most important variable influencing NVIDIA’s stock price. However, that hasn’t been the case. A review of the stock’s performance in the week following earnings over the past few quarters would reveal that shares rose in some and fell in others, indicating short-term price movements following earnings can be unpredictable.  

So, based on past trends, even a strong earnings report may not immediately lift NVIDIA’s stock higher. However, over time, NVIDIA’s shares will gain momentum, driven mainly by booming demand for its chips, rising data center investments, and a gradual easing of U.S.-China trade tension. 

The Long-Term Bull Case for NVIDIA Is Still Intact 

Constant demand for NVIDIA’s chips, especially its advanced Blackwell architecture and cloud graphics processing units (GPUs), is likely to drive future growth. Moreover, recent partnerships, such as with Meta Platforms, Inc. META, are likely to further boost GPU demand for AI training and data center applications. 

NVIDIA also anticipates data center spending worldwide to reach between $3 trillion and $4 trillion annually by 2030, which provides the company with ample opportunity to sell its computing hardware, drive sales, and mitigate stiff competition from rivals.  

Meanwhile, the Trump administration has approved the shipment of H200 chips to China, and Chinese authorities are permitting select companies like ByteDance and Alibaba Group Holding Limited BABA to purchase them, an arrangement that could support NVIDIA’s future growth. 

Buy, Hold, or Sell NVIDIA Stock Ahead of Q4 Earnings

NVIDIA may witness short-term stock fluctuations after its fourth-quarter earnings. However, strong results, surging GPU demand, AI-driven partnerships, global data center growth, and improving geopolitical conditions point to sustained long-term growth, making it a compelling investment today.  

NVIDIA, anyhow, has a net profit margin of 53%, which exceeds the Semiconductor - General industry’s average of 50.1%, underscoring its strong growth.

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Moreover, NVIDIA presents an attractive buying opportunity with a favorable valuation, as its forward price-to-earnings (P/E) ratio of 25.67 sits below the industry’s average of 29.12.

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For now, NVIDIA has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here. 


 

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This article originally published on Zacks Investment Research (zacks.com).

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