Nvidia CEO Affirms Big Tech's AI Spending Will Endure as Revenues Soar
Nvidia Corp. disclosed record revenue of $68.1 billion for the fourth quarter ended January 25, 2026, marking a 20% increase from the prior quarter and a 73% rise from the same period a year earlier.
The Santa Clara, California-based company attributed the growth to robust demand in its data center segment, which generated $59.4 billion in the quarter, up 22% sequentially and 82% year-over-year, fueled by sales of graphics processing units essential for artificial intelligence applications.
Full-year revenue reached $215.9 billion, reflecting a 65% advancement from fiscal 2025, with data center contributions totaling $189.2 billion, a 71% escalation.
Gaming revenue stood at $3.2 billion in the fourth quarter, up 8% from the previous quarter but down 2% from a year ago, while professional visualization brought in $1.8 billion, up 12% sequentially and 15% year-over-year.
Automotive and robotics segments contributed $1.1 billion, showing a 5% sequential decline yet a 28% annual gain.
The company's gross margin expanded to 76.8% on a GAAP basis and 77.4% non-GAAP, driven by a favorable product mix toward higher-margin AI-related offerings.
During the earnings conference call on February 25, 2026, Chief Executive Officer Jensen Huang addressed the sustainability of investments in AI infrastructure by major technology firms, which are projected to exceed $700 billion in capital expenditures for the year on data centers equipped for AI workloads.
Huang emphasized the linkage between computational resources and financial outcomes in the AI domain.
"In this new world of AI, compute equals revenues," Huang said.
He elaborated on the necessity of ongoing investments to support token generation, a key process in AI model operations. "Without compute, there’s no way to generate tokens," Huang said.
The executive highlighted visibility into demand extending through 2027, stemming from commitments by hyperscale clients such as Amazon Web Services, Microsoft Azure, and Google Cloud, which rely on Nvidia's Hopper and Blackwell architectures for scaling AI training and inference tasks.
Nvidia forecasted first-quarter fiscal 2027 revenue at $78 billion, plus or minus 2%, anticipating continued expansion in data center sales amid deployments of next-generation platforms like the GB300 superchip systems.
Operating expenses rose to $3.9 billion in the fourth quarter, up 15% from the prior period, reflecting investments in research and development totaling $2.8 billion and selling, general, and administrative costs of $1.1 billion.
Net income for the quarter amounted to $29.4 billion on a GAAP basis, or $1.76 per diluted share, while non-GAAP net income reached $27.1 billion, or $1.62 per diluted share.
For the full year, GAAP net income totaled $81.6 billion, or $4.90 per diluted share, and non-GAAP stood at $79.5 billion, or $4.77 per diluted share.
Cash flow from operations hit $38.2 billion in the quarter, enabling $15.6 billion in share repurchases and $1.2 billion in dividends paid.
The board authorized an additional $50 billion for stock buybacks, bringing the total available to $72.4 billion.
Jensen Huang pointed to diversification in demand beyond conversational AI, encompassing areas like recommendation systems, drug discovery, and autonomous vehicles, which bolster the company's outlook.
The networking business surpassed $31 billion in annual revenue, up more than tenfold from fiscal 2021, with products like Spectrum-X Ethernet solutions gaining traction for unifying distributed data centers into large-scale AI factories.
Partnerships with enterprises in healthcare, finance, and manufacturing further underpin the trajectory, as these sectors integrate Nvidia's Omniverse platform for digital twins and simulation.
The company maintains a workforce of over 30,000 employees globally, with ongoing expansions in facilities to support production ramps of advanced semiconductors fabricated by Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung.
