Nvidia shares plummeted 5.46%, erasing roughly $260 billion in market value in a single day. The sell-off came despite a “blockbuster” Q4 FY2026 earnings report that beat Wall Street’s expectations on nearly every metric, marking the company’s 14th consecutive quarter of exceeding revenue estimates.
This massive “sell-the-news” event was triggered by a growing disconnect between Nvidia’s spectacular fundamentals and investor anxiety over the long-term durability of the AI infrastructure boom.
Q4 FY2026: The “Beaten” Expectations
Nvidia reported records across its key segments, proving that demand for its Blackwell and Grace Blackwell platforms remains at a fever pitch.
| Metric | Reported (Q4 FY26) | Wall Street Forecast | Growth (Y/Y) |
| Total Revenue | $68.13 billion | $66.21 billion | +73% |
| Data Center Rev | $62.31 billion | $59.90 billion | +75% |
| Adj. EPS | $1.62 | $1.53 | +82% |
| Gross Margin | 75.2% | 74.9% | +1.7 pts |
- Full Year 2026: Total revenue reached a staggering $215.9 billion, a 65% increase over fiscal 2025.
- Guidance: Nvidia projected Q1 FY2027 revenue of $78 billion, significantly higher than the $72.6 billion analysts were expecting.
Why the Market “Voted with its Feet”
Despite the record numbers, several factors spooked investors, leading to the $260 billion wipeout:
- “Priced to Perfection”: Analysts noted that with the stock trading near all-time highs ($194 pre-earnings), the market had already “baked in” a massive beat. When the results were “only” excellent rather than “miraculous,” some investors took profits.
- The “AI Bubble” Fatigue: There is growing concern that the massive capital expenditure (Capex) by “Hyperscalers” (Microsoft, Meta, Google, Amazon) may be peaking. Rumors of a 50% vacancy rate in newly built AI data centers and softening rental prices for computing power added to the “bubble” narrative.
- Customer Concentration: Nvidia revealed that 91% of its revenue now comes from its Data Center business, which is heavily dependent on a handful of large cloud providers. Any pivot by these companies toward their own custom “in-house” chips is seen as a major long-term threat.
- Capital Allocation Disappointment: Investors were reportedly underwhelmed by Nvidia’s decision to continue reinvesting its massive cash pile ($58.5 billion) into the AI ecosystem rather than announcing a significant increase in dividends or a massive new buyback program.
- The “Vera Rubin” Transition: While Blackwell is currently the “king of inference,” investors are wary of any “order pauses” as customers prepare for the next-generation Vera Rubin platform slated for late 2026.
CEO Jensen Huang’s Stance
During the earnings call, Jensen Huang dismissed the bubble talk, asserting that “computing power is now revenue” and that the world is only at the beginning of an “AI Industrial Revolution.” He highlighted that approximately $300 billion to $400 billion in global capital is currently shifting toward the AI sector.
“Agentic AI has reached a tipping point… our customers are racing to invest in AI compute—the factories powering their future growth.” — Jensen Huang
The Bottom Line: While the stock took a major hit, many analysts (including Citigroup) remain bullish with price targets still near $300, viewing this 5% slide as a necessary “correction” in an otherwise dominant growth story.
