Nvidia Shares Slide 5% After Q4 Beat, Guides $78B Q1 Revenue
Nvidia shares fell 5% after Q4 results showed EPS of $1.62 versus $1.53 expected and revenue of $68.13 billion topping estimates. The company forecasted $78 billion revenue for Q1 but raised concerns about AI spending sustainability, customer concentration at 36%, and rising competition from AMD and Google chips.
1. Q4 Earnings Beat
Nvidia reported Q4 EPS of $1.62, surpassing the $1.53 consensus estimate, alongside revenue of $68.13 billion versus $66.21 billion expected. The results were driven by robust data center demand and continued strength in professional visualization.
2. Share Price Reaction
Despite the upside, shares declined 5% on February 26 as investors weighed concerns over the sustainability of AI-driven growth and sought clarity on longer-term demand dynamics.
3. Q1 Guidance Outlook
Nvidia projected $78 billion in revenue for Q1, exceeding analysts’ forecasts. Management’s bullish outlook reflects ongoing customer orders but underscores the importance of maintaining momentum into the next quarter.
4. Emerging Risks and Competition
Investor unease centered on two customers representing 36% of sales, sparking concentration risk worries. Additionally, competition is intensifying with AMD’s latest GPU launches and Google’s custom AI chips, while Nvidia’s decision to reinvest cash rather than boost dividends or buybacks disappointed some shareholders.