Nvidia Faces Critical Test Amid Market Crosscurrents

Nvidia's high-stakes quarterly report arrives as new U.S. tariffs threaten inflation, putting its AI growth and margins under intense investor scrutiny.

This week presents a dual challenge for Nvidia and its investors. The chipmaker's quarterly earnings report on Wednesday arrives against a backdrop of renewed economic uncertainty, stemming from a sudden shift in U.S. trade policy. This confluence of company-specific and macroeconomic factors creates a delicate environment where even a minor disappointment could shift market sentiment.

Macroeconomic Headwinds: Tariffs, Inflation, and the Fed

A significant shift in U.S. tariff policy has introduced fresh variables into the economic equation. Within the last 48 hours, the Supreme Court struck down previously enacted emergency tariffs (IEEPA) by a 6-3 vote. The administration's response was swift, announcing new, blanket 15% tariffs under Section 122 of the Trade Act of 1974, set to last for 150 days.

Initial market reaction was notably muted. U.S. equities broadly gained ahead of the week, with the tech-heavy Nasdaq 100 advancing 1.13%. This suggests many investors continue to believe the long-term growth drivers in the technology sector outweigh short-term political volatility.

However, the move brings inflation concerns back to the forefront. Estimates indicate the universal tariffs could raise the general price level by 0.5% to 0.6%, translating to additional costs of $600 to $800 per household. Consequently, attention turns to the Federal Reserve. This week alone features 11 scheduled speeches from Fed officials, while the upcoming Producer Price Index (PPI) data will serve as another crucial indicator for the future interest rate path.

High-Stakes Earnings: Growth and Margins in the Spotlight

On February 25, Nvidia is scheduled to release its results for the fourth quarter of fiscal 2026. Expectations are elevated, with consensus estimates pointing to revenue of approximately $65.7 billion and earnings per share (EPS) in the range of $1.52 to $1.53.

The focus for investors will extend beyond mere growth to the quality of that growth. A key metric will be the gross margin, which the company aims to maintain in the mid-70% range. Furthermore, the Data Center segment is anticipated to report quarterly revenue nearing the $60 billion mark. This division is widely viewed as the primary gauge for AI demand.

The implications for the stock are clear. Should revenue and margins meet these high expectations, the core artificial intelligence investment thesis would be reinforced. Conversely, a margin miss could be interpreted by the market as an early warning sign of rising competitive or cost pressures.

Structural AI Demand Provides the Foundation

The fundamental driver remains the global capital expenditure cycle for artificial intelligence infrastructure. Market research suggests investment spending (Capex) by major tech hyperscalers could reach $650 to $700 billion in 2026. Nvidia continues to occupy a central position in these deployment plans.

Illustrating this point, the report highlights two concrete developments: a multi-year agreement with Meta for millions of advanced compute units for hyperscale data centers, and a collaboration with Vertiv focused on power delivery concepts and modular solutions for AI data centers. These deals underscore that the opportunity extends far beyond semiconductors to encompass the entire infrastructure ecosystem required for large-scale AI.

Nvidia shares currently trade at €160.70, reflecting a solid gain of 4.04% over the past seven days. Come Wednesday, however, short-term price movements will likely be overshadowed by the company's ability to once again confirm expectations for both growth and profitability.