Nvidia delivered on earnings but still gave the bears ammo

Good morning! Today’s edition unpacks another ridiculous earnings report from Nvidia, the freshly inverted yield curve, and more. First time reading? Join 190,000 self-directed investors gaining an edge every morning. Sign up here.

Nvidia delivers big

If the Federal Reserve dictates the cost of money, then Nvidia determines the amount of hype in financial markets.?

The AI bellwether delivered on earnings once again Wednesday, smashing Wall Street’s expectations and reaffirming its status as the most important name in both the stock market and artificial intelligence.?

“Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter,” said CEO Jensen Huang.?

Here’s what the company reported for the fiscal quarter ending in January:?

• Earnings per share: $0.89, up 71% from a year ago, beating forecasts
• Quarterly sales: $39.3 billion, up 78% from a year ago, beating forecasts
• Quarterly profits: $22 billion, up 72% from a year ago, beating forecasts
• Full-year revenue: $130.5 billion, up 114% year-over-year, beating forecasts

Nvidia’s outlook, too, impressed Wall Street, with first-quarter revenue for fiscal 2026 forecasted to hit roughly $43 billion.?

“We’ve successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter,” Huang said. “AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionize the largest industries.”

Nvidia’s impact, of course, extends beyond its own balance sheet.

Its chips provide the oxygen to the AI economy while its dominance dictates how trillions of dollars in capital are allocated across markets.?

3 takeaways from the blowout results

• Data center domination: Nvidia’s $35.6 billion in data center revenue, a 93% increase from a year ago, reinforces that spending on AI infrastructure remains robust. This — alongside President Trump’s $500 billion Project Stargate — should quell concerns that China’s DeepSeek will slow demand for chips and capital.
• Blackwell’s smashing records: The next-gen chip generated $11 billion in revenue in the quarter, calling it the “fastest product ramp” in Nvidia’s history. Huang said demand for Blackwell chips is “amazing” and that upcoming AI models will require even more computing power, not less.
• The stock is still priced to perfection: Blowout results did not fuel stock gains overnight, which suggests investors may still be uneasy about Nvidia’s valuation. One red flag, too, is that gross margins declined amid the shift to higher-cost, more complex products.

For the bulls, these earnings confirmed that AI spending isn’t slowing down and Nvidia will continue to be the prime beneficiary of the arms race.?

For the bears, the stock's tepid reaction and margin pressures suggest that even perfection may not be enough to justify Nvidia’s sky-high valuations forever.?

Shares of Nvidia are up about 65% over the last 12 months.

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