What factors could impact NVDA's Q1 2026 EPS?

NVIDIA's Q1 2026 EPS is likely to be impacted by several key factors:

1. **Gross Margin Variations**: NVIDIA's gross margin has been a significant factor in its financial performance. The company reported a 73% gross margin in Q4 2025, which is slightly down from 76% in the previous year. For Q1 2026, the company's gross margin is expected to be 70.6% and 71.0% for GAAP and non-GAAP, respectively. A decrease in gross margin could potentially impact EPS.
2. **Revenue Growth**: NVIDIA has seen significant revenue growth, with a 114% year-over-year increase in full-year revenue for Q4 2025. The company's Data Center segment, which is a primary growth driver, generated $35.6 billion in revenue, up 93% from the prior year. Maintaining this growth trajectory will be crucial for EPS.
3. **Operating Expenses**: As NVIDIA continues to expand and transition to more complex and higher-cost systems, especially within the Data Center segment, increased operating expenses could impact EPS. The company's ability to manage these expenses efficiently will be important.
4. **Market Demand and Competition**: The demand for NVIDIA's AI computing infrastructure and products, such as the Blackwell AI supercomputers, plays a critical role in its financial performance. However, increased competition and market saturation could impact growth and, consequently, EPS.
5. **Geopolitical Factors**: Concerns about potential tariffs on NVIDIA's inputs and export restrictions have affected investor sentiment. Any changes in geopolitical policies could impact NVIDIA's supply chain and, subsequently, its financial results.
6. **Strategic Partnerships**: NVIDIA's partnerships with major cloud service providers and other companies are expected to drive growth. The success of these partnerships and the integration of NVIDIA's products into their infrastructure will be important for EPS.
7. **Innovation and Product Transition**: The transition to new architectures like Blackwell and the next wave of AI innovations could impact NVIDIA's performance. The company's ability to innovate and meet the evolving needs of the market will be crucial for maintaining EPS.

In conclusion, NVIDIA's Q1 2026 EPS is likely to be influenced by its gross margin, revenue growth, operating expenses, market demand and competition, geopolitical factors, strategic partnerships, and innovation. Managing these factors effectively will be key to maintaining financial performance.