Nvidia Posts Record Profits but Shares Fall 5.46% Amid High Expectations and Revenue Concentration Concerns

On the night of Wednesday, February 25, 2026, Nvidia announced its Q4 FY2026 results, delivering exceptional numbers across the board. The company posted record revenues of $68.1 billion, a 73% year-over-year increase and up 20% from the previous quarter. For the full fiscal year, revenues reached $215.9 billion, a 65% rise from the prior year. Adjusted earnings per share came in at $1.62, beating analyst expectations of $1.52. Nvidia’s guidance for Q1 FY2027 stunned the market, projecting $78 billion in revenue - $6 billion above Wall Street estimates.

Despite these achievements, Nvidia's stock closed at $184.89, down 5.46%, marking its worst day since April 2025. Trading volume soared to 351.1 million shares, 104% above its three-month average.

Why did the market sell off? The first explanation is the classic 'sell the news' phenomenon: shares rose over 4% in after-hours trading on the results, only to reverse once markets opened. A deeper reason is that Nvidia’s extraordinary performance has set a new standard, so anything short of a miracle is now seen as a disappointment.

More significantly, investors are increasingly concerned about revenue concentration. Hyperscalers - Alphabet, Amazon, Meta, and Microsoft - accounted for over 50% of Nvidia’s data center revenue, tying the company’s fortunes to the capital spending decisions of just four clients. Collectively, these firms plan to spend nearly $700 billion on AI infrastructure in 2026, up from $410 billion in 2025.

Another factor weighing on the stock is the absence of expected revenue from Chinese data centers, as Nvidia’s guidance for the next quarter assumes no contribution from China due to US export restrictions.

On the technology front, CEO Jensen Huang announced that Nvidia has begun shipping prototype units of its new Rubin architecture to key customers, with full production expected in the second half of 2026. Rubin is designed to drastically lower AI inference costs and is projected to drive growth in the next fiscal year. However, the gap between the end of the Blackwell cycle and the start of Rubin introduces uncertainty for investors.

The broader sector was also affected: AMD closed down 3.41% at $203.68, Intel fell 3.03% to $45.46, while investors sought safe havens, boosting gold and US Treasury prices. The S&P 500 closed down 0.5%, and the Nasdaq dropped 1.2%.

The central question for the market is not whether Nvidia is strong - the numbers clearly say yes - but whether AI demand is a lasting trend or a cyclical investment wave nearing its peak. Even Nvidia’s best results cannot answer that.