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Key Points
- NVIDIA's fourth-quarter results reveal that its growth is far from slowing, continuing to accelerate faster than expected.
- Analysts responded favorably to the news, lifting price targets and pointing to the high end of the range and another solid double-digit upside.
- Institutional trends reveal this stock was aggressively accumulated in early 2026, highlighting its value to investors.
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NVIDIA’s (NASDAQ: NVDA) Q4 earnings release for its fiscal 2026 (FY2026) proves that its AI growth is far from slowing. While fears about AI spending and disruption persist, NVIDIA’s revenue growth continues to outperform at hyper levels with forecasts for more of the same.
The takeaway is that AI may be a bubble or not; either way, cash is still flowing into the market, and the peaks have yet to be reached. What this means for NVIDIA’s investors is that revenue will perform at least at current levels for the next few quarters to several years, underpinning robust cash flow, enabling reinvestment in next-gen technologies, acquisitions to expand the business, and capital returns to drive shareholder value.
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NVIDIA’s Wow-Quarter Reveals Acceleration in Critical Markets
NVIDIA’s Q4 reveals acceleration in critical markets with revenue of $68.3 billion outpacing MarketBeat’s reported consensus by 300 basis points. Strength was seen across segments, with growth in automotive and gaming aligning with signs of an emergent supercycle reported by industrial chipmakers.
Data Center, the critical segment, grew by 22% sequentially and 75% year-over-year (YOY), driven by demand for high-performance computing and AI infrastructure. It now accounts for more than 90% of revenue and is expected to remain strong in the upcoming quarters. Pro-Visulation grew by 158% YOY, followed by a 48% increase in Gaming and a 6% gain in Automotive.
Margin news was also robust, underpinning the analysts’ stock price outlook. The company experienced improved leverage at all levels, resulting in $1.62 in adjusted EPS, nearly a dime better than expected.
The 500 basis points of outperformance not only outpaced revenue growth but also left earnings up 82% compared to the 73% top-line increase. Looking forward, margins are expected to contract slightly, with Q1 FY2027 adjusted gross margin forecast to decline by only 20 bps compared to the Q4 release.
As strong as the revenue and earnings growth was, the guidance is stronger. The company forecasts $78 billion in Q1 FY2027 revenue, up $10 billion, or 14.7% sequentially and 77% YOY, excluding China. Including China, assuming sales are ever approved by both sides at the same time, growth will be stronger. Other critical details include the cash flow and free cash flow (FCF), which approached $35 billion, just over half of revenue in Q4 and expected to remain strong in the upcoming year.
Analysts Highlight 50% Upside Potential for NVIDIA’s Stock in 2026
The analyst response to NVIDIA’s report and guidance is bullish, affirming the uptrend and forecast for at least 35% upside from late February’s support target.
While consensus is pegged near $268, the handful of updates and revisions issued immediately after the release include price target increases and affirmations, pointing to the high-end of the range. No reductions were logged: the consensus of fresh targets is near $300, and the high end is $400.
A move to the consensus target would be sufficient to set a fresh all-time high, breaking the market out of its consolidation range. In this scenario, the technical targets suggest a move to the $270- $280 level is the minimum, and that this market could double in the bull case. Other indicators, including stochastic and moving-average-convergence-divergence (MACD), align with trend-following entries that sustain upward price movements.
Analyst and institutional sentiment trends suggest this will be a broad market movement. MarketBeat tracks more than 50 analysts with current ratings, sentiment is pegged at Buy with a 96% Buy-side bias, and the institutions aggressively accumulated in early 2026. The data reveals they owned more than 65% of the stock, accumulated throughout 2025, and ramped activity in Q1 2026. The balance in early Q1 is more than $4 bought for each $1 sold, which provides solid support and a robust tailwind.
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NVIDIA’s Balance Sheet Is a Great Reason to Own It
Market drivers and fears aside, NVIDIA’s business is healthy today and looks well-positioned for the next few quarters, as it generates robust cash flow. The cash flow is reflected in the balance sheet, which shows increased cash, assets, and equity despite aggressive investments, capital returns, and acquisitions. The cash, up approximately 50% at year’s end, topped $60 billion, driving a greater-than-50 % increase in current assets (including receivables and inventory growth) and a nearly 100% increase in total assets.
Equity, the measure of shareholder value, nearly doubled to $157 billion and leverage, the measure of debt risk, is very low. NVIDIA carries debt, but it declined in the year and is offset by cash. The cash balance leaves the company with net cash relative to total liabilities, putting it in an enviable position to continue executing its strategy while building shareholder value.
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