Nvidia's Pivotal Earnings Report: A Litmus Test for AI Market Sentiment in February 2025

STOCK TL:DR

Nvidia Q4 2025 Earnings Overview

Nvidia’s earnings report (Feb 26) is crucial for AI market sentiment. The company recovered 22% after a historic stock drop in January but faces pressure to meet high expectations. Analysts are closely watching revenue from AI GPUs and the transition to the new Blackwell architecture.

Stock Performance & Technicals

Metric	Value	Key Insights
Recent Rebound	+22% in Feb	Strong recovery from Jan drop
50-day Moving Avg	$134.13	Stock broke above, bullish sign
200-day Moving Avg	$136.69	Important technical level
Current Resistance	$140	Key level to maintain upward trend
Critical Support	$128.99	Below this, stock could drop to $110
Post-Earnings Volatility	±3.56%	High beta, large price swings expected

Earnings Expectations & AI Business

Segment	Projected Revenue	Key Factors
Total Q4 Revenue	$38.1B	AI demand fueling growth
Data Center Revenue	$34B	53% QoQ increase, driven by AI GPU sales
Gross Margins	75.2%	Stable, but FY2026 margins expected to drop 3%
Blackwell GPUs	4x faster than H100	May cause delays in purchases as customers wait

Market Sentiment & Analyst Views

Factor	Status	What It Means
Valuation	24x FY26 earnings	At lower end of historical range
Analyst Ratings	43/52 Buy ratings	Mostly bullish, but some uncertainty
Price Target Range	$110 – $185	High dispersion, reflecting uncertainty
Options Market	High demand for $150 calls, $125 puts	Split sentiment—big move expected

Key Takeaways

Nvidia’s earnings will set the tone for AI stocks in 2025.
Technical levels look positive, but a drop below $128.99 could trigger selling.
AI GPU sales are booming, but delays due to Blackwell transition could impact near-term revenue.
Stock is priced for growth, leaving little room for earnings disappointment.

Nvidia Corporation’s fiscal Q4 2025 earnings report, scheduled for February 26, arrives at a critical juncture for both the company and the broader artificial intelligence (AI) sector. After a historic $589 billion single-day market value decline in late January triggered by concerns over Chinese AI startup DeepSeek, Nvidia’s stock has staged a remarkable 22% rebound in February, reclaiming key technical levels and reigniting debates about its valuation and growth trajectory1 2. Analysts and investors alike view this earnings release as a make-or-break moment that will either validate the AI investment thesis or expose vulnerabilities in Nvidia’s market dominance. With consensus revenue estimates for the Data Center segment reaching $34 billion and intense scrutiny on the Blackwell GPU transition, this report will likely set the tone for semiconductor and AI-related equities through mid-20253 4.

Technical Positioning and Market Psychology

Reclaiming Critical Moving Averages

Nvidia’s February rally has been technically significant, with shares breaking back above both the 50-day ($134.13) and 200-day ($136.69) moving averages—key indicators watched by institutional investors1 4. This recovery from the DeepSeek-induced selloff demonstrates resilient demand, but the stock now faces immediate resistance at $140, a level Oppenheimer’s Ari Wald identifies as pivotal for maintaining upward momentum1 2. The 14-day Average True Range of ±5.72% suggests heightened volatility expectations around earnings, with algorithmic traders likely to amplify price swings given the stock’s high beta profile4.

Volume Dynamics and Sentiment Divergence

Despite the price recovery, trading volume has declined 23% from January peaks, creating a divergence that Sierra Alpha’s David Keller interprets as caution among institutional buyers1 4. The $128.99 support level—tested repeatedly in February—now serves as a critical failsafe; a breakdown below this threshold could trigger stop-loss orders and precipitate a retest of November 2024 lows near $1102 4. Options markets reflect this bifurcated outlook, with implied volatility skew showing elevated demand for both $150 calls and $125 puts heading into the earnings event.

Earnings Expectations and Blackwell GPU Transition

Data Center Segment Under the Microscope

Visible Alpha consensus estimates project $38.1 billion in total Q4 revenue, driven primarily by the Data Center segment’s anticipated $34 billion contribution—a 53% quarter-over-quarter increase3. This growth stems from hyperscalers’ accelerating adoption of Hopper architecture GPUs for large language model training. However, inventory digestion cycles at major cloud providers like AWS and Azure have created bifurcation in analyst models, with revenue estimates ranging from $31.8 billion to $38.1 billion for the segment3.

Gross Margin Compression Concerns

While Nvidia’s non-GAAP gross margins are expected to hold steady at 75.2%, Visible Alpha data reveals a 300 basis point reduction in FY2026 margin projections due to anticipated pricing concessions on Blackwell GPUs3. The Blackwell B200’s promised 4x training performance uplift over Hopper H100 has created a “product transition paradox”—customers may delay orders awaiting new hardware, creating near-term revenue risk despite long-term technology leadership1 3. Bank of America’s Vivek Arya notes that Blackwell’s energy efficiency improvements (30% reduction in total cost of ownership) could paradoxically reduce per-unit revenue if customers prioritize operational savings over compute density1.

Market Sentiment and Analyst Positioning

Valuation Multiples at Inflection Point

At current prices, Nvidia trades at 24x FY2026 earnings—the lower bound of its historical 25x-56x range—suggesting investors have priced in moderating growth1 3. Sell-side analysts remain broadly bullish, with 43 of 52 covering firms maintaining Buy ratings, but price target dispersion has widened to $110-$185 reflecting uncertainty about Blackwell adoption rates3 4. The stock’s 180% appreciation since January 2024 has created a high bar for positive earnings surprises, with options markets pricing in a ±3.56% move post-announcement4.