Can Nvidia (NVDA) Q1 FY2027 Guidance Surprise To Avoid A "Sell The News" Reaction

$NVIDIA(NVDA)$ is set to report its fiscal Q4 2026 earnings on Wednesday, February 25, 2026, after the market closes. As the primary bellwether for the AI era, this report is expected to be a major macro event for the technology sector.

Key Projections & Expectations

Wall Street is pricing in "perfection," with expectations for significant year-over-year growth.

Nvidia’s fiscal Q3 2026 report (released November 19, 2025) was a definitive "beat and raise" performance that silenced many skeptics regarding the "AI bubble." However, the market's reaction provided a vital lesson in the difference between company performance and investor expectations.

Q3 2026 Earnings Summary

Nvidia delivered record-breaking numbers across its core segments, driven almost entirely by the relentless demand for AI infrastructure.

• Total Revenue: $57.0 billion (Up 62% YoY), beating the consensus of $54.9B.

• Data Center Revenue: $51.2 billion (Up 66% YoY), accounting for ~90% of total sales.

• Earnings Per Share (EPS): $1.30 (Up 67% YoY), beating the $1.26 estimate.

• Gross Margin: 73.6% (Non-GAAP), slightly lower than the 75% seen in previous quarters due to the early costs of ramping the complex Blackwell architecture.

• CEO Commentary: Jensen Huang famously stated that demand for Blackwell is "off the charts" and that the world has entered a "virtuous cycle" of AI adoption.

The Q4 Guidance: A "Shock and Awe" Forecast

Nvidia guided Q4 2026 revenue to $65.0 billion (±2%), which was significantly higher than the Wall Street consensus of ~$61.5B. This indicated that the sequential growth acceleration wasn't slowing down, but actually picking up speed as the Blackwell GPU began to ship in volume.

The 3 Critical Lessons Learned

1. High Bar for "Perfection"

Despite beating revenue estimates by $2 billion and guiding $3.5 billion above expectations, the stock initially dipped or stayed muted.

• Lesson: For Nvidia, a "beat" is expected. Investors now trade based on the magnitude of the beat and the whisper numbers (private institutional targets) rather than the public consensus. Even "stellar" guidance can result in a "sell the news" event if the stock has already rallied into the report.

2. Hardware Transitions are Expensive

Nvidia’s gross margins dipped slightly (from ~75% toward ~73.6%) during the quarter.

• Lesson: Ramping up a revolutionary new product like Blackwell involves "yield learning" and supply chain inefficiencies. Management taught investors that margins might be "volatile" (relatively speaking) during product transitions, even if total profit dollars are skyrocketing.

3. The Shift from Training to Inference

The Q3 report highlighted that Nvidia is no longer just a "training" company.

• Lesson: A massive portion of demand is now coming from inference (running the AI models after they are built). Management noted that Blackwell offers a 10x performance boost in inference, which successfully countered the bear narrative that specialized "inference-only" chips from competitors would steal Nvidia’s lunch.

Key Metrics to Watch

While the "beat and raise" pattern is almost expected, investors are shifting focus toward the durability of the AI cycle and execution on new hardware.

• Blackwell Ramp & Rubin Roadmap: Investors want specifics on the production scaling of the Blackwell architecture. Any mention of supply bottlenecks for Blackwell Ultra or early timelines for the next-gen Rubin architecture (expected late 2026) will drive the narrative.

• Hyperscaler Capex Plans: Comments on whether big spenders (Meta, Microsoft, Google, Amazon) are maintaining their massive GPU order volumes or pivoting toward internal custom silicon (ASICs).

• The "Inference" Shift: Watch for management's commentary on AI moving from "training" to "inference." If inference-related demand is growing as predicted, it justifies a longer runway for Nvidia’s chips.

• Sovereign AI & Enterprise Breadth: Beyond "Big Tech," are nations and smaller enterprises starting to buy at scale? This "broadening" of the customer base is critical for long-term valuation.

• Supply Chain Constraints: Specifically, look for updates on CoWoS packaging and GDDR7 memory availability, which have been reported as potential bottlenecks.

Nvidia (NVDA) Price Target

Based on 58 analysts from Tiger Brokers app offering 12 month price targets for Nvidia in the last 3 months. The average price target is $254.98 with a high forecast of $432.78 and a low forecast of $138.00. The average price target represents a 33.12% change from the last price of $191.55.

Short-Term Trading Analysis

Nvidia's stock has recently seen a period of consolidation, trading around the $180–$195 range, down from its October highs of ~$212.

1. The Volatility Play

Options markets are currently implying a move of approximately ±$12 (roughly 6–7%) following the earnings release.

• Potential "Volatility Crush": Implied volatility (IV) often spikes before the call and collapses immediately after. For short-term traders, selling premium (e.g., Iron Condors or Vertical Spreads) can be a strategy to profit if the stock stays within the expected range, though this carries high risk if a massive gap occurs.

2. Support & Resistance Levels

• Upside: A "beat and raise" that clears uncertainty could push the stock toward its 52-week high of $212.

• Downside: Technical analysts note a support level near $170. A break below this could see the stock test the $150 zone as part of a larger correction.

3. The "Sell the News" Risk

In recent quarters, even a "beat" hasn't always triggered a rally because the "whisper numbers" (unofficial analyst expectations) are often higher than the public consensus. Unless the Q1 FY2027 Guidance is significantly above $72B–$75B, the stock may experience a "sell the news" reaction.

Technical Analysis - Exponential Moving Average (EMA)

If we looked at how NVDA was trading before and after its previous Q3 2026 earnings, we could see that it did hit a high at around $195 before setting down to a low, and since 2026 begin, we can see that NVDA has maintain its positive RSI momentum and we can see that it is trading within $186 and not creating any new high despite reaching $193 at one point yesterday (23 Feb).

So could we see a breakout of its share price if NVDA earnings were to surprise with strong future demand for its AI chips, and also the CAPEX concerns of hyperscalers are also addressed with these new orders? And what would be the new demand for NVDA chips moving forward with the tariffs risk coming back?

I think I would continue to hold my position in NVDA, and maybe play option on the bullish side for anticipation of a surprise earnings.

Summary

Nvidia (NVDA) is scheduled to report its fiscal Q4 2026 earnings tomorrow, Wednesday, February 25, 2026, after the market closes. This report is viewed as a critical barometer for the health of the entire AI sector.

Financial Expectations & Consensus

Wall Street expects another record-breaking performance, though the "beat and raise" hurdle remains exceptionally high.

• Revenue: Consensus is $65.6B – $65.7B (up ~67% YoY). Whisper numbers from more bullish analysts suggest a move toward $67B–$69B is possible.

• Earnings Per Share (EPS): Estimated at $1.52 – $1.53 (up ~71% YoY).

• Data Center: Expected to approach $60B, driven by the mass-market ramp of the Blackwell architecture.

Three Key Metrics to Watch

1. Q1 FY2027 Guidance: This is the primary swing factor. The market expects guidance around $71B–$72B, but a "bull case" forecast of $75B+ could trigger a major rally.

2. Blackwell Yields & Margins: Investors are watching for gross margins to return toward 75%. Any production bottlenecks or "yield learning" costs associated with the Blackwell architecture could temporarily weigh on the stock.

3. Sovereign & Enterprise Demand: Beyond the "Big Five" hyperscalers, analysts want to see if demand is broadening into Sovereign AI (national infrastructure) and Inference workloads.

Short-Term Trading Setup

Volatility: Options markets are pricing in an implied move of roughly ±6.5% to 8% ($11–$15 per share) post-earnings.

Technical Levels: The stock has recently consolidated near $180–$190.

• Bullish: A clean beat-and-raise could send the stock toward its 52-week high of $212.

• Bearish: Failure to exceed high "whisper" expectations could see the stock test support at $170 or even $150.

Sentiment: Sentiment is cautiously optimistic; while the AI trade is crowded, valuation has compressed to a forward P/E of ~35x-45x, making the risk/reward more balanced than in previous cycles.

Appreciate if you could share your thoughts in the comment section whether you think NVDA could break out with a clean beat-and-raise, and send NVDA beyond $205.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.