Nvidia NVDA is set to release its fiscal fourth-quarter 2025 earnings report on Feb. 25 in the US. Here’s Morningstar’s take on what to look for in Nvidia’s earnings and the outlook for its stock.

Key Morningstar metrics for Nvidia

  • Fair Value Estimate: $240.00
  • Morningstar Rating: ★★★★
  • Morningstar Economic Moat Rating: Wide
  • Morningstar Uncertainty Rating: Very High

Nvidia earnings release date

  • Wednesday, Feb. 25, after the close of trading in the US

What to watch for in Nvidia’s Q4 earnings

  • Hyperscaler capex plans are massive and accelerating for 2026. We’ll seek confirmation that this spending is still flowing to Nvidia. The firm essentially hinted at $300 billion of revenue for calendar 2026, and we’ll seek validation (if not upside) from here. Upside seems even more likely based on capex guidance from Meta, Amazon, and Google.
  • We’d like to better understand Nvidia’s work with OpenAI, which will need to rebound to remain a key partner for the firm in the long run. Nvidia and OpenAI don’t appear to have formally agreed on their previously announced partnership. We’ll seek a status update.
  • Memory and hard disk drives have emerged as bottlenecks, and we’ll seek insight into whether this will affect the timing of Nvidia’s shipments and/or data center construction. Nvidia might also provide an update into AI sales into China. China no longer moves the needle for us significantly, but it could provide a near-term revenue boost beyond our current model.
  • We anticipate that investors will still seek a beat-and-raise quarter. Nvidia remains on a healthy streak of reporting results ahead of its quarterly guidance while providing guidance for the upcoming quarter ahead of FactSet consensus estimates, although such “beats” are less impressive than at the dawn of AI in 2023.

Fair Value estimate for Nvidia

With its 4-star rating, we believe Nvidia’s stock is moderately undervalued compared with our long-term fair value estimate of $240 per share, which implies an equity value of $5.5 trillion. Our fair value estimate implies a fiscal 2026 (ending January 2026 or effectively calendar 2025) price/adjusted earnings multiple of 51 times and fiscal 2027/2028 forward price/adjusted earnings multiples of 31 times and 25 times, respectively.

Our fair value estimate and Nvidia’s stock price will be driven by its prospects in the data center and AI GPUs, for better or worse. Nvidia’s DC business has achieved exponential growth already, rising from $3 billion in fiscal 2020 to $115 billion in fiscal 2025 and will likely be $191 billion in fiscal 2026, representing 66% annual growth.

Economic Moat rating

We assign Nvidia a wide economic moat, thanks to intangible assets around its graphics processing units and high customer switching costs around its proprietary software, Cuda, for AI tools, which enables developers to use Nvidia’s GPUs to build AI models.

Nvidia was an early leader and designer of GPUs, which were originally developed to offload graphic processing tasks on PCs and gaming consoles. Nvidia has emerged as the clear market share leader in discrete GPUs. We attribute Nvidia’s leadership to intangible assets associated with GPU design, as well as the associated software, frameworks, and tools required by developers to work with these GPUs.

Financial strength

Nvidia is in outstanding financial health. As of October 2025, the company held $60.6 billion in cash and investments, as compared with $8.5 billion in short- and long-term debt. Semiconductor firms tend to hold large cash balances to help them navigate the cycles of the chip industry. During downturns, this provides them with a cushion and flexibility to continue investing in research and development, which is necessary to maintain their competitive and technological positions.

Nvidia has more than enough of a cash cushion to handle downturns, and we struggle to foresee opportunities for the company to spend this excess cash other than stock buybacks. Nvidia’s dividend is virtually immaterial relative to its financial health and forward prospects.

Risk and uncertainty

We assign Nvidia an Uncertainty Rating of Very High, due to the nascent nature of the AI market. Nvidia is an industry leader in GPUs used in AI model training, while carving out a good portion of demand for chips used in AI inference workloads (which involve running a model to make a prediction or output).

The biggest risk, in our view, is the pace of AI spending going forward. Nvidia prospered from exponential AI growth in recent years, but such spending comes from a handful of customers, and they all have an incentive to eventually optimize, if not reduce, their investments over time. Within these AI buildouts, we also think that tech leaders will turn to in-house chips for at least a portion of their workloads.

We also foresee geopolitical risk and uncertainty, most notably with US restrictions that have prevented Nvidia, at various times, from selling its AI products into China.

NVDA bulls say

  • The AI infrastructure opportunity is massive, and Nvidia foresees $3 trillion-$4 trillion of annual AI infrastructure spending by 2030.
  • Nvidia’s data center GPUs and Cuda software platform have established the company as the dominant vendor for AI model training and inference.
  • Nvidia is expanding nicely within AI, not just supplying industry-leading GPUs but also moving into networking, software, and services to tie these GPUs into even more-powerful clusters.

NVDA bears say

  • Nvidia’s customers are a handful of the largest Tech companies in the world, and they all have an incentive to eventually diversify away from Nvidia to some extent.
  • AI infrastructure spending has been impressive but revenue and use cases are less certain, perhaps providing doubts that there is a good return on investment on AI that might lead to a spending downturn at some point in the future.
  • Geopolitics have entered the AI space, most notably limiting Nvidia’s AI opportunities in China.

Get Morningstar insights in your inbox