Core Viewpoint - Nvidia reported strong fiscal fourth-quarter earnings, surpassing revenue and EPS expectations, but faced a significant sell-off due to a weaker-than-expected gross margin forecast [1][2][4]. Financial Performance - Nvidia posted $39.33 billion in revenue and an adjusted EPS of $0.89, exceeding analyst expectations of $38.05 billion and $0.84 EPS [1]. - The company guided for $43 billion in revenue for the first quarter, surpassing the $42.3 billion expected by analysts [1]. Market Reaction - Following the earnings report, Nvidia's stock experienced an 8.5% decline, erasing nearly $250 billion from its market cap and pushing it below the $3 trillion mark [2]. - As of the latest update, NVDA shares were trading at $120.15, reflecting a 13% decline since the start of the year [3]. Gross Margin Concerns - The primary trigger for the stock sell-off was Nvidia's first-quarter gross margin forecast of 71%, which fell short of Wall Street's expectation of 72.1% [4]. - CFO Colette Kress indicated that gross margins would remain in the low 70s during the initial ramp-up of Blackwell, with expectations to return to the mid-70s later in the fiscal year [5][6]. Analyst Sentiment - Despite the sell-off, analysts remain optimistic about Nvidia's long-term growth, citing strong AI demand and rapid adoption of Blackwell GPUs [6][7]. - BofA Securities reiterated a 'Buy' rating and raised its price target to $200, emphasizing Nvidia's leadership in AI despite challenges [7]. - Piper Sandler maintained an 'Overweight' rating with a $175 price target, highlighting overwhelming demand for Blackwell AI chips [10]. Revenue Growth and Future Outlook - Blackwell contributed $11 billion in data center revenue in Q4, indicating strong demand that may keep the company sold out through 2025 [10]. - Analysts expect margins to rebound to the mid-70% range by year-end, with continued confidence in Nvidia's long-term growth prospects [11][12]. - Morgan Stanley described Nvidia's growth as 'remarkable' despite transitional challenges, noting that Hopper still accounted for two-thirds of data center revenue [13][14].