Will Data Center Unit Help NVIDIA Reach Its $65B Q4 Revenue Goal?

Core Insights - NVIDIA Corporation (NVDA) is expected to report its fourth-quarter fiscal 2026 results on February 25, with a target to surpass $65 billion in sales, following a record revenue of $57.01 billion in the third quarter, marking a 62% year-over-year increase [1][11] Group 1: Revenue Growth and Drivers - The company is optimistic about continuing growth momentum, primarily driven by its data center business, which reported $51.22 billion in revenues for the third quarter, up 66% year-over-year [2][11] - Demand for accelerated computing, generative AI, and large-scale model training is rising, contributing to the data center segment's growth, with a Zacks Consensus Estimate of $58.72 billion for fourth-quarter revenues, indicating a 65% year-over-year increase [3][4] - Analysts project NVIDIA will exceed its fourth-quarter sales target, with current estimates at $65.56 billion, reflecting a 66.7% year-over-year surge [5] Group 2: Competitive Landscape - Advanced Micro Devices (AMD) and Intel Corporation (INTC) are significant competitors in the AI data center space, with AMD gaining traction through its MI300 series accelerators and Intel reasserting its presence with the Gaudi series of AI accelerators [6][7][8] Group 3: Valuation and Earnings Estimates - NVIDIA's shares have increased approximately 34.6% over the past year, compared to a 36% gain in the Zacks Semiconductor – General industry [9] - The company trades at a forward price-to-earnings ratio of 25.36, below the industry's average of 28.62 [13] - Earnings estimates for fiscal 2026 and 2027 imply year-over-year increases of approximately 55.9% and 57%, respectively, with current estimates for fiscal 2026 remaining at $4.66 per share [16]