NVIDIA Q4 FY2025 Earnings Preview: High Stakes Amid AI Dominance and Emerging Risks

NVIDIA Corporation ( NASDAQ: NVDA ) is poised to release its fiscal fourth-quarter 2025 earnings on February 26, 2025, after market close. As the bellwether for artificial intelligence (AI) hardware demand, this report carries significant weight for both the semiconductor sector and broader equity markets. Analysts, investors, and competitors alike are scrutinizing NVIDIA’s performance amid soaring expectations, supply chain complexities, and intensifying competition. Below, we dissect the consensus forecasts, guidance dynamics, risks, and upside catalysts shaping this critical earnings event.

Revenue and Earnings Per Share (EPS)

Wall Street anticipates NVIDIA to deliver $38.1 billion in revenue for Q4 FY2025, representing a 73% year-over-year surge [1] [13] . This figure aligns with the company’s upwardly revised guidance of $37.5 billion (±2%) provided in November 2024 [3] [13] . Notably, independent analyses project even higher figures, with some retail investors forecasting $40.65 billion in revenue based on historical beats and robust demand for Hopper and Blackwell architectures [3] [12] .

On profitability, the consensus non-GAAP EPS estimate stands at $0.85, a 66% increase from the year-ago quarter [11] [13]. Gross margins are expected to moderate slightly to 73.5% due to higher costs associated with ramping production of next-generation Blackwell GPUs, which utilize advanced packaging technologies [9] [16] . Despite this, operating margins remain robust at ~62%, reflecting NVIDIA’s pricing power in AI accelerators [1] .

Segment Performance: Data Center Dominance

The Data Center segment, NVIDIA’s growth engine, is projected to generate $34.0 billion in Q4 revenue, up 50% from earlier fiscal year estimates [1]. Hyperscalers like Amazon, Microsoft, and Google-parent Alphabet have driven this demand, collectively investing $52 billion in AI infrastructure during Q2 2024 alone—a 54% annual increase [4]. Analysts at UBS and Oppenheimer highlight that Blackwell-related revenue could reach $9 billion in FY2026, nearly double prior estimates, as enterprises accelerate generative AI deployments [16].

NVIDIA’s forward guidance will likely overshadow backward-looking results. Key areas of focus include:

Blackwell GPU Ramp: Management’s commentary on the timeline for volume production of Blackwell systems (e.g., GB200 NVL72) will be critical. Suppliers like Super Micro Computer have flagged delays in liquid cooling infrastructure, pushing volume shipments to early 2026 [8] [9] . Analysts expect NVIDIA to confirm Q4 2025 shipments but may temper near-term expectations amid supply chain bottlenecks [10] [16].

FY2026 Revenue Projections: Visible Alpha consensus forecasts $183.8 billion in Data Center revenue for FY2026, hinging on Blackwell adoption [1]. However, estimates vary widely ($152.4B–$236.0B), reflecting uncertainty around total addressable market (TAM) expansion and competitive threats [1] [12].

Gross Margin Trajectory: While Q4 margins are guided at 73.5%, longer-term projections show a 300-basis-point decline to 75.2% in FY2026 due to Blackwell’s complex manufacturing [9]. Investors will seek reassurance that margin compression remains contained.

Capital Expenditure Trends: With hyperscalers planning $42 billion in Q1 2026 AI spending, NVIDIA’s ability to meet this demand—while navigating TSMC’s advanced packaging constraints—will shape its growth narrative [12] [16].

Supply Chain and Production Challenges

NVIDIA’s reliance on Taiwan Semiconductor Manufacturing Company (TSMC) for advanced packaging has created a critical bottleneck. Delays in PCIe 6.0 and power management integrated circuits (PMICs) threaten Blackwell’s rollout, with volume deployments now expected in late 2025 [8] [9]. Supplier Super Micro Computer recently trimmed its FY2025 revenue guidance by 30%, citing Blackwell-related delays [8].

Competitive Pressures

Chinese AI firm DeepSeek has emerged as a disruptive force. Its DeepSeek-V3 model, developed for just $5.6 million using NVIDIA’s H800 chips, challenges the cost structure of large-language models (LLMs) [13]. While some analysts argue this could spur broader AI adoption—benefiting NVIDIA—others warn that optimized algorithms may reduce per-chip demand [12] [13]. Domestically, AMD and Intel are aggressively targeting NVIDIA’s data center stronghold with rival GPUs [14].

Geopolitical and Macro Risks

Potential U.S. tariffs on AI chips and escalating U.S.-China tech tensions loom over NVIDIA’s $9 billion in annual China sales [12]. Meanwhile, the stock’s 31x forward P/E (based on FY2026 estimates) leaves little room for error, with technical indicators signaling vulnerability below $110 support [5] [8].

Hyperscaler Spending and Blackwell Adoption

Bank of America’s Vivek Arya underscores NVIDIA’s “generational investment” potential, citing a $400 billion AI chip TAM by 2027 [5] [12]. With Meta, Alphabet, and Amazon increasing capital expenditures by 35%+ in 2024, demand for NVIDIA’s H100 and upcoming Blackwell GPUs appears insatiable [12] [16]. Arya’s $190 price target (61% upside) assumes Blackwell revenue reaches $75.1 billion in FY2026, driven by AI training and inference workloads [1] [5].

Valuation Re-Rating Potential

At 26x forward earnings, NVIDIA trades near the lower end of its historical range, despite 52% annual EPS growth projections through 2030 [5] [12]. A beat-and-raise scenario could reignite momentum, with Mizuho Securities forecasting $260 billion in AI accelerator sales by 2027—44% of which would flow to NVIDIA [12].

Key Focus Areas for the Earnings Call

Data Center Momentum: Confirm whether Q4 revenue aligns with the $34.0B consensus and provide color on backlog trends for H100 and Blackwell systems [13].

Blackwell Supply Chain: Detail progress in resolving PMIC and cooling bottlenecks, plus customer commitments for GB200 NVL72 deployments [8] [9].

China Exposure: Address how U.S. export controls and DeepSeek’s rise impact long-term growth in the region [12] [13].

Margin Resilience: Reaffirm 73.5% gross margin guidance for Q1 FY2026 despite Blackwell cost headwinds [9] [16].

Capital Return: Update on the $46.5 billion share repurchase authorization, given $9.5 billion in Q3 buybacks [3] [12].

NVIDIA stands at a crossroads. While its AI supremacy remains unchallenged, execution risks and valuation concerns have tempered investor enthusiasm. The company must thread the needle between ambitious growth targets and practical supply chain realities to justify its premium valuation. For markets, a strong report could reignite the AI trade, whereas guidance missteps may trigger sector-wide volatility. With options pricing in a ±10% post-earnings move [10], Wednesday’s release promises to be a defining chapter in the AI revolution’s trajectory.

Note: All financial figures in USD. Sources cited inline per provided search results.