AI-Driven Datacenter Chip Demand to Drive NVIDIA's Q4 Earnings

NVIDIA Corporation NVDA is set to report its fourth-quarter fiscal 2026 earnings on Feb. 25, and expectations are high.

As the undisputed leader in artificial intelligence (AI) computing, NVIDIA has been at the center of the AI boom, with its high-performance datacenter graphics processing units (GPUs) fueling growth across industries. With demand for AI infrastructure still climbing and businesses committing more capital to generative AI, NVIDIA is likely to post another strong quarter.

Expectations From NVIDIA’s Q4 Results

NVIDIA expects fourth-quarter fiscal 2026 revenues to reach $65 billion (+/-2%), underscoring the broad-based strength of AI adoption. This represents a remarkable leap from prior years as more businesses allocate significant capital toward AI-driven growth initiatives. The Zacks Consensus Estimate is pegged at $65.56 billion, which indicates a whopping 66.7% increase from the year-ago reported figure and a rise of 15% sequentially.

The consensus mark for fourth-quarter earnings is pegged at $1.52, implying a year-over-year surge of 70.8% and sequential growth of 16.9%. Earnings surpassed the Zacks Consensus Estimate three times in the trailing four quarters while missing on one occasion, the average surprise being 2.8%.

Click here to know how NVDA’s overall fiscal fourth-quarter results are likely to be.

Datacenter: NVIDIA’s Key Growth Driver

NVIDIA’s datacenter business has been a major reason for its recent growth. In the third quarter of fiscal 2026, the segment’s revenues jumped 66% year over year and 25% sequentially to $51.22 billion.

This strong trend is expected to continue. The Zacks Consensus Estimate for datacenter revenues is pegged at $58.72 billion, indicating an approximately 65% year-over-year increase and a 14.6% sequential rise. This growth projection is mainly because companies and cloud providers are investing heavily in AI and relying on NVIDIA’s GPUs to build and run AI systems.

NVIDIA’s latest chip designs, Hopper, Ampere and Blackwell, are powering many AI applications, from training large models to providing quick responses in real time. Big tech companies like Microsoft, Amazon and Google continue to use NVIDIA chips in their AI products and services, helping keep demand high.

Strong AI Demand Drives NVIDIA’s Growth

The rise of generative AI has transformed industries, driving an insatiable need for high-performance computing power. From ChatGPT to AI-driven content creation, marketing automation and healthcare innovations, enterprises are integrating AI into their core operations at an unprecedented pace.

The global generative AI market is expected to grow rapidly. Research from Fortune Business Insights estimates the market will reach $1,260.15 billion by 2034, expanding at a CAGR of 29.3%. This explosion in AI adoption underscores the critical role NVIDIA plays in shaping the future of AI infrastructure.

NVIDIA’s chips are used across many industries, including healthcare, automotive, manufacturing and cybersecurity, to power things like digital assistants, smart recommendations and language translation. As more businesses add AI tools, NVIDIA’s products are becoming even more important.

NVDA’s Zacks Rank and Other Stocks to Consider

Currently, NVIDIA carries a Zacks Rank #2 (Buy).

Analog Devices ADI, Amphenol APH and Monolithic Power Systems MPWR are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Analog Devices sports a Zacks Rank #1 (Strong Buy), while Amphenol and Monolithic Power Systems each carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has moved upward by 9.4% over the past seven days to $10.90 per share, calling for an increase of 39.9% year over year. Analog Devices shares have climbed 41.9% in trailing 12 months.

The Zacks Consensus Estimate for Amphenol’s full-year 2026 earnings is pegged at $4.32 per share, revised upward by 8 cents over the past 30 days and suggests a year-over-year jump of 29.3%. Amphenol shares have soared 113% over the past year.

The Zacks Consensus Estimate for Monolithic Power Systems’ fiscal 2026 earnings has been revised upward to $21.63 per share from $21.07 over the past 30 days. Monolithic Power Systems shares have surged 57.9% over the past year.

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

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