Nvidia Dips Despite Record Earnings
Nvidia delivered record earnings and a bullish forecast, but its stock still dipped as investors weighed growth concerns and China export rules. In a major hardware shift, the company also confirmed liquid cooling will now be standard for its data center products, a move expected to reshape its supply chain.
Nvidia's fourth-quarter revenue for fiscal 2026 surged to a record $68.1 billion, a 73% increase year-over-year, with full-year revenue reaching $215.9 billion. The company's data center division was the primary growth engine, reporting a record $62.3 billion in quarterly revenue, which now accounts for over 91% of the company's total sales. Despite these figures and a forecast of $78 billion for the next quarter, which surpassed analyst expectations, the stock fell approximately 5.5% following the announcement. Analysts attribute the drop not to Nvidia's performance but to broader market anxieties, including profit-taking after a significant rally and concerns about the long-term sustainability of the massive capital expenditures on AI infrastructure by tech giants. The U.S. government's export controls targeting China add a layer of uncertainty. Nvidia's outlook for the upcoming quarter does not assume any data center compute revenue from China. The restrictions on high-performance AI chips like the H200 could reshape a market that previously accounted for a significant portion of Nvidia's data center business. The transition to liquid cooling for its next-generation data center products, including the GB200 and GB300 series, is a direct response to the immense heat generated by increasingly powerful GPUs. This move is set to benefit a new ecosystem of suppliers specializing in advanced thermal management, such as Taiwan-based Cooler Master and CoolIT Systems, who are providing custom liquid-cooled modules.
