Good morning. Traders likely felt some relief on Wednesday evening following Nvidia’s strong Q4 earnings report.
The tech giant, which currently has the largest market cap in the world at about $4.7 trillion, reported record revenue for Q4 of $68.1 billion, up 20% from Q3 and 73% from a year ago. The company also reported record full-year fiscal 2026 revenue of $215.9 billion, up 65%. Nvidia’s data center business posted record quarterly revenue of $62.3 billion, up 22% from Q3 and 75% year over year.
Expectations were high going into the report, as investors looked for reassurance about the sustainability of hyperscaler spending on AI. Jensen Huang, founder and CEO of Nvidia, said in a statement that enterprise adoption of AI agents is “skyrocketing.”
For the first quarter of fiscal 2027, Nvidia guided to revenue of $78 billion. Total supply-related commitments rose from $50.3 billion at the end of the third quarter to $95.2 billion at the end of the fourth quarter, Fortune reported. In a statement, Nvidia said it has “strategically secured inventory and capacity to meet demand beyond the next several quarters.”
On the earnings call, Huang made what I think is an impactful comment: “In this new world of AI, compute equals revenues.” He also said, “Without investing in capacity today, without investing in compute, there cannot be revenue growth.” Computing power is essentially no longer viewed as a “cost center” but as a direct engine of revenue, according to Huang.
Architecture is incredibly important, as “it’s more than strategic now; it directly affects their earnings,” he said. “And choosing the right architecture—the one with the best performance per watt—is literally everything,” he added.
Nvidia’s major cloud/hyperscaler customers include Meta, Microsoft, Amazon Web Services, Alphabet, and Oracle, and CFO Colette Kress said on the call that large cloud service providers account for roughly 50% of the company’s data‑center revenue.
There is a fundamental platform shift from classical machine learning to generative AI, Kress said. “Strong evidence of ROI as hyperscalers upgrade massive traditional workloads to generative AI, including search, ad generation, and content recommender systems, is encouraging our largest customers to accelerate their capital spending,” she said.
For example, at Meta, advancements in their GEM model increased ad clicks on Facebook to 3.5 times their previous level and boosted conversions on Instagram by more than 1%, “translating into meaningful revenue growth,” she said.
However, Kress emphasized that Nvidia’s customer base is diverse and includes non-hyperscalers ranging from AI companies and large enterprises to supercomputing customers and sovereign buyers.
For finance chiefs, the message from Nvidia’s latest quarter is less about one company’s outsize gains— and more about a shifting rulebook for growth.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Ronda Chu was promoted to CFO of San Francisco International Airport (SFO). She brings more than 25 years of experience in financial consulting and management, including roles with Booz Allen Hamilton, Reed & Associates, and Jacobs/LeighFisher. Chu joined SFO in 2008 as an airport economic planner and most recently served as managing director of finance. Before her appointment, Kevin Bumen held both CFO and chief commercial officer roles. He will continue as chief commercial officer.
Stephanie Lewis was promoted to CFO of Forbes, effective immediately. She will oversee the global finance organization. Lewis was most recently SVP of finance. She joined Forbes in 2008 as a financial analyst and has since held a series of increasingly senior leadership roles within the finance organization, including controller. Before joining the company, Lewis began her career at a small CPA firm in New York City, working in audit and personal tax, and later joined Grant Thornton’s commercial audit practice.
Big Deal
“Disrupting Malicious Uses of AI” is a new report by OpenAI. The case studies in this report, such as those involving romance scams, show how threat actors typically use AI in combination with more traditional tools such as websites and social media accounts. “Threat activity is seldom limited to one platform,” according to OpenAI.
Going deeper
“How AI Is Reshaping Human Intuition and Reasoning” is a new episode of Wharton’s podcast, “Ripple Effect.” Wharton professor Gideon Nave and postdoctoral researcher Steven D. Shaw discuss research on the concept of “cognitive surrender,” where people often accept AI-generated answers, even incorrect ones, with high confidence. They explain how this emerging “third system” of artificial cognition can reshape decision-making in business, education, and everyday life.
Overheard
“Complexity is exactly what suffocates scale.”
—May Habib, CEO and co-founder of Writer, an agentic AI platform, makes this point in a Fortune opinion piece titled “The AI leadership reckoning is here.” Enterprises have spent decades promoting people who manage complexity, according to Habib. “The bigger the org chart and the more layers you oversee, the higher you climb,” she writes. “But in the agentic era, that model is fundamentally backwards.”
