Nvidia Shares Fall 5% Despite Earnings Beat On AI Spending Fears Big

TLDR

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Nvidia shares closed down 5% at $184.8 after earnings beat
Fourth quarter revenue rose 73% to $68.1 billion
Full year sales climbed 65 percent to $215.9 billion
Company guided $78 billion revenue, above Wall Street estimates

Nvidia shares fell 5% on Thursday despite a strong earnings report, as concerns over AI spending weighed on sentiment. The stock declined even after the company posted record revenue and issued guidance above market expectations.

The chipmaker, a key supplier of AI processors, reported fourth quarter fiscal 2026 revenue of $68.1 billion. That marked a 73 percent increase from a year earlier.

Strong earnings beat fails to support stock

Nvidia exceeded Wall Street revenue estimates for the quarter. Analysts had projected lower figures ahead of the report. The company also projected revenue of $78 billion for the upcoming quarter. That forecast came in above estimates below $72.3 billion.

For the full fiscal year, Nvidia generated $215.9 billion in sales. That represented a 65 percent rise compared with the prior year. The results initially lifted the stock above $200 in post market trading.

No AI bubble. Only an AI boom.
At the @ndtv https://t.co/Uo8ihZsQev Summit, @nvidia’s Jay Puri, Executive Vice President, Worldwide Operations who led the delegation for the @OfficialINDIAai Impact Summit, made it clear: GPU demand is “insatiable”, infrastructure is fully lit,… pic.twitter.com/4g3rzH0N3i
— Shweta Rajpal Kohli (@ShwetaRKohli) February 27, 2026

However, the rally did not hold when regular trading began. Shares opened lower and continued to decline during the session. The stock closed at $184.8, down more than 5 percent for the day.

AI spending concerns pressure sentiment

The decline came as investors assessed the durability of enterprise AI spending. While demand for AI chips remains strong, questions have emerged about the pace of infrastructure investment.

Large cloud providers such as Alphabet and Amazon have increased capital expenditures. They continue to expand data center capacity to support AI workloads. Yet some investors are focused on near term returns from those investments.

Market participants are also watching broader economic signals. Higher spending on AI infrastructure requires sustained funding from technology firms. Any slowdown in that trend could affect chip demand growth.

Semiconductor sector declines alongside Nvidia

Other semiconductor stocks also faced selling pressure during the session. Broadcom shares fell 3.5 percent, while Micron Technology dropped 3 percent. Advanced Micro Devices declined 3.4 percent.

The broader market moved lower as well. The Nasdaq Composite retreated 1.2 percent during the day. The S&P 500 declined 0.5 percent, and the Dow Jones Industrial Average shed 0.4 percent.

Technology stocks weighed on overall market performance. Investors shifted focus from earnings beats to spending trends. The move reflected caution across the semiconductor space.

Outlook remains tied to AI investment trends

Nvidia remains a central player in AI hardware supply. Its chips power data centers used for training and deploying AI models. The company has benefited from strong demand over the past year.

Management’s guidance suggests continued revenue growth in the coming quarter. Still, share performance indicates that investors are weighing broader spending patterns.

The market reaction shows that strong financial results may not always prevent short term declines. For now, AI spending trends remain a key factor influencing Nvidia shares and the wider semiconductor sector.