Nvidia Earnings Preview: A "2+2 Quarter" Is The Minimum

NVDA is slated to report earnings after US market close today. Investors are expected to focus on directional commentary on visibility into 2027, non-traditional customer demand trends, competitive dynamics, and China business trends. Attention will also be geared towards guidance/commentary around Blackwell & Rubin. 

Needless to say, expectations are high for Nvidia as customers have announced huge capex plans, but a positive stock reaction is key for the Nasdaq after recent underperformance. As Arnaud Girod, head of cross-asset strategy at Kepler Cheuvreux, said, “we’re in the thick of uncertainty about the disruption of AI with the market de-rating entire segments of the stock market.” 

Here is a snapshot of consensus expectations: 

In its preview, Bloomberg notes that Nvidia's report will be scrutinized to assess the durability of AI demand and the rapidly evolving competitive dynamics, but the bigger question is whether it will be enough to solidify tech’s rebound amid a tumultuous period for the industry, one which has seen NVDA and the broader Nasdaq index go nowhere since October. 

There are plenty of signs that it might. The chip maker remains the biggest driver of profit growth in the Magnificent Seven, a group that’s been penalized more than the broader S&P 500 Information Technology basket, which includes the software names these AI giants are poised to disrupt. While fears of disruptions will continue to haunt parts of the industry, increased adoption is exactly what Big Tech investors need to see to gain confidence that the infrastructure spending is justified. As suchm Nvidia’s results will serve a reminder that the indiscriminate selloff has overshot fundamentals.

Looking further out, NVDA's outlook is just as robust. While ever-increasing AI spending is casting a cloud over hyperscalers, Nvidia is on the receiving end of those outlays. As noted earlier, analysts forecast its data center sales to more than quadruple by 2030, further underpinning profit expectations.

The key risk to these bright projections is intensifying competition from the rise of custom-AI chips, which are set to explode in the years to come. They won’t make Nvidia’s GPUs obsolete, however, custom-built hardware will pose an increased challenge to Nvidia’s chip dominance as hyperscalers try to reduce costs and gain an edge. How fast it happens, and whether the pie shrinks for Nvidia or continues to expand alongside with adoption, is the critical issue. For its part, Nvidia has dismissed the idea that custom silicon will replace its chips, arguing that it sells not only hardware but an entire ecosystem that’s very broad and hard to match by competitors. 

Here are the key things to watch for in the report:

• Magnitude of the beat: As discussed below, JPMorgan notes buy-side investors expect a “2+2” quarter, or the company to beat its guidance for the reported quarter and the upcoming April quarter by $2 billion each.
• Blackwell & Rubin: During its last earnings call, the company reiterated it has visibility into $0.5 trillion in revenues from the two chip lines through the end of calendar year 2026.
• Margins: The firm’s adjusted gross margin is anticipated to be ~75% in the fourth quarter, a level that will be closely watched amid rising prices for memory chips.
• China revenues: Two months after President Donald Trump’s decision to allow shipments of the AI processors to China, Nvidia has yet to sell any of its H200 chips there. While analysts aren’t counting on China demand for today’s report, it remains a long-term drag on the outlook.

Buyside Bogeys:

• 4Q Revenue: $67.5bn vs guide $65bn
• 4Q Gross Margin : 75%
• 1Q Revenue Guide: ~$74-75bn

Next, a quick snapshot of what to expect from JPM's Market Intel team:

• Positioning Score (1 = max short/UW, 10 = max long/OW): 8
• Implied Move: 4.4%

Sentiment: Positioning is unchanged over the past month, and crowding remains high; but as readers can see from JPM's buyside survey - a redacted portion of which follows below - that buysiders again expect a 2+2 quarter (beat the guide by $2b and beat Street expectations for the April-Q guide by $2b), mostly excluding any China revenue. That said, JPM cautions that beats haven’t seemed to matter since early 2024; but this time things feel different: as NVDA struggle to find new ideas, investors are increasingly commenting on the shocking de-rating of fabless AI leaders AVGO and NVDA - the latter of which now trades cheaper than the SOX.

Concerns over OpenAI funding and share-loss (growing even over this past weekend, with reports of OpenAI “reducing” its 2030 compute target) have fed a TPU > Blackwell narrative that’s proving tough to shake; and investors eye the recent, opaque META announcement with skepticism. And there is also concern that high memory prices put the 75% gross margin at longer-term risk.

That all said, nobody disputes NVDA’s strong year ahead (with many expecting a clearer reiteration or increasing of the $500BN target); and GTC is coming – along with OFC, where discussion is sure to highlight NVDA’s CPO innovations.

And there’s the important heuristic: over that past 3 years, NVDA has provided most of its outperformance in the first half of any calendar year, so if it were to kick into high gear, now is the time. 

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Turning to UBS, prop trader Christina Dwyer writes that against a backdrop of middling stock performance, bullish supply‑chain signals, and a management team that appears increasingly frustrated with persistent doubts around growth and margin sustainability, the bank's analyst Tim Arcuri believes the earnings set‑up looks constructive—particularly ahead of GTC next month.

Tim models fiscal 4Q (January) revenue of ~$67.Bbn, around $2.5 bn above guidance. Any revenue add‑back from China remains uncertain, as the region is increasingly relying on homegrown GPUs. However, using Advanced Micro Devices (AMD) as a reference point, he sees the potential for a few billion dollars of incremental China‑related revenue to land in fiscal 4Q results. That said, he expects Nvidia to exclude China from forward guidance and models ~$76 bn in fiscal 1Q (April) revenue. Investor bogeys for the revenue guide appear to sit in the $74–75 bn range.

On key performance indicators, UBS highlights that roughly $145 bn (around 25%) was added to 2026 hyperscale capital expenditure during the most recent earnings cycle alone. Overall hyperscale capex is now up ~60% year‑to‑date, while sovereign demand remains in its early stages.

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Finally, Goldman's ETF desk writes that its clients have significantly increased their length to semiconductors since NVDA’s previous earnings release (Nov-19-2025). SMH, the largest and most actively traded semiconductor ETF has a 19% weight in NVDA (its largest holding), while SOXX, the second-largest product, has a 7% allocation (its third-largest holding)… Flows appear to be performance driven with the SOX Index outperforming the S&P 500 by ~22% since NVDA last reported, with many of the index’s other constituents responsible for the double digit lead. 

Goldman has seen buyers of both SMH and SOXX on the desk this morning across numerous client types.