Despite Blockbuster Results, Nvidia Faces Downbeat Market Reaction Amid Weak Sentiment

Kara Greenberg

Thu, February 26, 2026 at 11:46 PM GMT+9 2 min read

In this article:

•                                       StockStory Top Pick 
  

  NVDA

  -4.29%

Key Takeaways

Nvidia shares fell on Thursday after the company posted better-than-expected quarterly results.

Wall Street analysts said the market's reaction could underscore weak sentiment.

Nvidia delivered a blockbuster earnings report. But investors aren’t rewarding the stock in kind.

The shares were down more than 2% in early trading Thursday, a day after the company posted fourth-quarter results that blew past analysts’ estimates, thanks to booming demand for its AI chips.

Nvidia (NVDA) said its data center revenue, which accounted for the lion’s share of its sales, hit a fresh record high as its Big Tech clients raced to buy up its chips to power their data centers.

Why This Is Significant

The negative reaction to a strong print from the chipmaker could underscore weak sentiment surrounding many AI-exposed stocks and the market overhang from uncertainty around the trajectory of the technology.

Some Wall Street analysts pointed to the concentration of Nvidia’s sales as worrisome. Roughly half of the company’s data center revenue came from its largest Big Tech clients.

However, several suggested the muted reaction underscores broader skepticism around the AI trade, with worries about the technology’s impact holding back the sort of stock gains the company’s fundamentals would otherwise merit.

Morgan Stanley analysts, who called it the “largest, cleanest beat and raise in the history of the semis industry,” said they were surprised by the weak response.

Bullish analysts at HSBC said that while Nvidia’s results were strong, perhaps it was “lacking new narratives” to stoke fresh enthusiasm for the shares.

Citi and Morgan Stanley said the next catalyst for Nvidia bulls to look forward to may come from the company’s GPU Technology Conference in March. The company is expected to give more updates on its most advanced chips and product roadmap at the event.

While ratings are still in flux, most Wall Street analysts tracked by Visible Alpha remain overwhelmingly bullish on the stock, expecting it to reach new highs in the next 12 months.

Heading into Thursday’s session, shares of Nvidia were up about 5% for 2026 so far, but 7% off their October highs.

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