Nvidia forecasts upbeat quarterly sales as AI boosts chip demand

Arsheeya Bajwa

Thu, February 26, 2026 at 6:34 AM GMT+9 3 min read

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By Arsheeya Bajwa

Feb 25 (Reuters) - 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% in ‌extended trading.

The world’s most valuable company expects fiscal first-quarter sales of $78 billion, plus or minus 2%, compared with analysts’ average estimate ‌of $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 ​center infrastructure are paying off.

“Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth,” CEO Jensen Huang said in a statement.

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 $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 centers.

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

However, the company said it had received licenses this month from the U.S. government to ship “small amounts” of its H200 chips to customers in China.

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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 U.S. government.

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 program to attract and retain world-class talent,” the ​company said in a statement.

(Reporting by Arsheeya Bajwa and Zaheer Kachwala in Bengaluru, and Stephen Nellis and Max A. Cherney ​in San Francisco; Editing by Shinjini Ganguli, Sayantani Ghosh and Matthew Lewis)

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