Nvidia forecasts upbeat quarterly sales as AI boosts chip demand

Published Thu, Feb 26, 2026 · 06:20 AM

CHIPMAKER Nvidia forecast first-quarter revenue above market estimates on Wednesday, betting on Big Tech’s unabated spending on its artificial intelligence processors amid widespread scrutiny of massive AI investments.

Shares of the company rose over 3 per cent in extended trading.

The world’s most valuable company expects fiscal first-quarter sales of US$78 billion, plus or minus 2 per cent, compared with analysts’ average estimate of US$72.60 billion, according to data compiled by LSEG.

Investors are looking to Nvidia’s results to gauge whether the hundreds of billions of dollars that Big Tech is pouring into data centre infrastructure are paying off.

Wall Street has been betting on signs of robust demand for Nvidia’s top-of-the line AI chips, an assumption backed by hefty capital expenditure from Alphabet, Microsoft, Amazon.com and Meta Platforms, expected to total at least US$630 billion in 2026, with most of the spending earmarked for data centers and processors.

Businesses and governments are spending relentlessly in the race to develop the most sophisticated AI tech, or risk falling behind.

But signs of risk to Nvidia’s long-held dominance in making AI chips are emerging. Smaller rival AMD is set to unveil a new flagship AI server later this year and has clinched deals with Nvidia’s top customers, including Meta.

Meanwhile, Alphabet’s Google has emerged as a top rival with a deal to provide Claude chatbot creator Anthropic with its in-house chips called TPUs. Google is also in talks to supply Meta, according to media reports.

Big Tech is increasingly turning inward in the quest for more computing power, dedicating resources to designing in-house chips that they are deploying in their data centres.

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The company reported January-quarter sales of US$68.13 billion, beating estimates of US$66.21 billion, according to LSEG data. It said adjusted profits came in at US$1.62 per share, compared with estimates of US$1.53, according to LSEG data.

In a closely watched results report, which was released about 10 minutes later than expected, Nvidia said its forecast for the current quarter did not include any expected revenue from sales of its data centre chips to China.

Analysts and investors were counting on the potential return of Nvidia’s AI chip sales to China, earlier restricted due to export curbs placed by the US government.

CEO Jensen Huang said last month that he hopes China will allow the company to sell its powerful H200 AI chip in the country and that the license is being finalised.

Rival AMD has added sales of AI chips back to its forecast for the current quarter after it received licenses to ship some of its modified processors to China.

Nvidia said it has secured inventory and capacity to meet demand beyond the next several quarters.

The company also said it will include stock-based compensation expense in its non-GAAP financial measures, veering away from broader industry trends at a time when tech firms are fighting each other for top AI engineers and researchers.

“Stock-based compensation is a foundational component of Nvidia’s compensation programme to attract and retain world-class talent,” the company said in a statement. REUTERS