Nvidia reported fourth-quarter revenue of $68.1bn ($66.2bn expected), up 73% year on year. Growth remained broad-based, with Data Centre revenue rising 75% to $62.3bn as demand for AI compute continued to accelerate.
Underlying operating profit rose 81% to $46.1bn ($44.5bn expected), reflecting both strong volume growth and sustained margin strength.
Free cash flow rose to $34.9bn in the quarter. Net cash, including leases, stood at $51.5bn at period end. Shareholder returns totalled $4.1bn over the quarter, $3.8bn via buybacks and the remainder dividends.
For the coming quarter, revenue is expected to be around $78.0bn.
The shares were broadly flat in after-hours trading.
Our view
Nvidia has delivered a monster quarter, and if 73% revenue growth wasn’t enough, guidance points to yet another acceleration in the coming quarter to 77% at the midpoint. We think expectations for revenues in 2026 and 2027 are still too low and expect to see a slew of analyst upgrades in the coming weeks/months. The bar was high heading into results, but Nvidia has continued to surpass expectations.
Recent deals with OpenAI, Meta, and even the UK government, along with commentary on insatiable demand for the latest chip stacks, cement our view on Nvidia’s leadership position. But key customers are exploring viable alternatives, at least on paper, as they seek more computing capacity and diversification away from a single supplier.
The real question is how those options stack up in practice. Designs and promises of similar performance are one thing; track record at scale is another, and no one matches Nvidia there.
Nvidia’s breadth remains underrated: a full data centre business spanning chips, software, networking and more. Its chip architecture is evolving rapidly, with new products released annually that deliver more computing power and significantly better energy efficiency. Even if rivals can offer parts of the stack, Nvidia’s fully integrated solution will be hard to beat.
It is remarkable to see a company of Nvidia’s size deliver over 70% revenue growth, especially when it has effectively been shut out of what was once a core market, China. Sales of its deliberately reined-in chips are struggling to secure the necessary approvals, and we are less confident about a near-term resolution than in the past.
Two questions persist: can the current AI spending wave sustain growth beyond the next few years, and will Nvidia remain as dominant as AI shifts from training models to everyday inference?
On the former, we think it can, given the breadth of emerging AI use cases and our checks showing that demand for AI compute is as strong as ever. On the latter, we think management could do more to help investors map out the product roadmap, and would not be surprised to see announcements soon.
This uncertainty likely helps explain why the shares trade at only a modest premium to the wider market on a forward price‑to‑earnings basis, despite exceptional growth.
That doesn’t mean there’s no upside - for now, the sheer weight of earnings growth and cash generation can continue to do the heavy lifting, and that’s why it’s one of our Five Shares to Watch picks for 2026. Key risks centre on AI sentiment and hiccups in the AI buildout, both of which could weigh on valuation and growth expectations.
Environmental, social and governance (ESG) risk
The semiconductor sector is medium-risk in terms of ESG. Overall, this risk is managed adequately in Europe and North America but has considerable room for improvement in the Asia-Pacific region. Its reliance on highly-specialised workers means labour relations is one of the key risk drivers. Other risks worth monitoring include resource use, business ethics, product governance, and carbon emissions.
According to Sustainalytics, Nvidia’s management of material ESG risks is strong.
As the market leader in power- hungry GPU processors it’s recognised for paying close attention to the energy efficiency of its products. Business ethics concerns are addressed by Nvidia’s compliance committee, which comprises the CFO and several other senior managers. Additionally, a third-party hotline is available for both employees and third-party stakeholders to anonymously submit ethical concerns. Its human capital initiatives are also strong, which is reassuring given the talent gap in the industry. However, diversity amongst the workforce could still be improved.
The author owns shares in NVIDIA.
Nvidia key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.