Nvidia’s Market Cap Dips Below $3Trillion Despite Earnings Beat and Raise

Nvidia's stock (NASDAQ: NVDA) dropped by 8.48% on Thursday, closing near the low of the day after earnings beat expectations, against the backdrop of further tariff comments. Nvidia announced its earnings after Wednesday's closing bell, beating on top and bottom lines, along with a raised outlook.

Markets seemingly were in a state of flux, with the stock initially carving out gains to open the session at $135, only to bleed through the day in closing firmly red. The drop in Nvidia's stock moved the market cap under $3 trillion, with the bulls now looking for the $120 level to hold firm.

Nvidia's revenue of $39.3 billion on the quarter marked a 12% increase from the previous quarter and a 78% increase compared to the same period last year.

For the full year, Nvidia's revenue reached a record $130.5 billion, signifying a 114% growth from the previous year. This impressive performance was reflected in their earnings per share, which increased by 14% from the last quarter to $0.89, surpassing analysts' expectations of $0.85. Year-over-year, this represents an 82% uplift.

Looking ahead, Nvidia has issued its guidance for the first quarter of 2026, projecting revenue to be around $43.0 billion, with a potential variance of 2%. This forecast represents a 9.4% QoQ growth and a substantial 65.4% YoY growth.

One of the significant drivers of this growth is Nvidia’s data center business. For Q4, the company reported record data center revenues of $35.6 billion, marking a 16% quarter-over-quarter increase and a 93% rise year-on-year. For the entire year, data center revenue surged 142% to $115.2 billion.

Jensen Huang, CEO of Nvidia, attributed part of this success to the strong demand for Blackwell AI supercomputers, highlighting massive production scale and sales prospects.

To add further confusion to the mix, analysts were largely impressed with the print, as BofA ($200 from $190), Morgan Stanley ($162 from $152), Bernstein ($185 from $175), Truist ($205 from $204), and DZ Bank ($156, upgraded to Buy) all raised price targets, or ratings on the day.

Broader market uncertainty in the light of tariff comments, the drop in the Nasdaq 100, and the crypto market all moving to the bear side in the short term all indicate risk appetite is waning. The Nasdaq is down 2.02% year-to-date, Bitcoin has dropped ~25% from recent highs, and NVDA itself is around 20% from highs.

We will have to wait and watch to see how markets move in the days and weeks ahead, with analysts' upgrades in contrast to price action. This morning's pre-market indicates a gain of 1% for the stock, but there is long road back. Is the recent move to the downside part of a pattern of range trading for the stock, or are we set for a rebound if tariff's are not as bad as initially outlined? We will be watching for clues.