February 24, (GeokHub) Nvidia, the leading chipmaker driving much of the AI revolution, is set to release its quarterly earnings on Wednesday, drawing intense scrutiny from investors eager to see whether the company can maintain its profit momentum amid massive Big Tech AI spending. With industry giants planning $630 billion in capital investments this year, Nvidia remains a bellwether for AI market growth—but emerging competition is starting to test its dominance.
After fueling the U.S. stock market rally for the past three years, Nvidia’s shares have seen modest gains so far in 2026, rising just around 2%. Analysts note that while the company has historically exceeded expectations, slower growth in early 2026 suggests the AI chip market may be entering a more competitive phase.
Rising Rivals in the AI Chip Market
Alongside Advanced Micro Devices, which is set to launch a new flagship AI server later this year, Alphabet has become a notable competitor. Google has supplied its in-house TPUs to Anthropic, the creator of the Claude chatbot, and is reportedly in talks to provide chips to Meta, a major Nvidia client.
In response, Nvidia has bolstered its market position through strategic partnerships. Last year, the company reportedly paid $20 billion to license chip technology from Groq, enhancing its capabilities in AI inference—the process that allows trained models to answer questions in real time. Nvidia has also agreed to supply millions of chips to Meta, though the deal’s value remains undisclosed.
Despite its AI market leadership, Nvidia has raised questions about the sustainability of spending commitments. The company has delayed part of its previously discussed $100 billion investment in OpenAI, reportedly scaling it back to $30 billion.
“This earnings report is crucial,” said Ivana Delevska, Chief Investment Officer at Spear Invest. “Investors want reassurance that AI spending is sustainable and not indicative of a bubble. Evidence of continued earnings growth will be critical.”
Expected Growth and Financial Performance
Wall Street anticipates that Nvidia’s profit for the quarter ending January will have surged more than 62%, slightly down from 65.3% in the previous quarter, reflecting tougher year-over-year comparisons. Revenue is expected to climb over 68% to $66.16 billion, with forecasts for the next quarter projecting an additional 64.4% increase to $72.46 billion.
RBC analysts predict that first-quarter revenue could come in at least 3% above estimates, while Delevska expects Nvidia to exceed projections by as much as $10 billion—over 13% higher than anticipated.
Strong Demand, but Potential Constraints
Demand for Nvidia’s premium AI chips, which serve as the “brains” for servers handling massive AI workloads, is expected to remain robust. Executives indicated discussions with customers regarding data center orders for next year, fueling expectations for an updated $500 billion order backlog.
However, potential supply chain limitations, particularly on TSMC’s 3-nanometer production lines, may restrict how quickly Nvidia can deliver its AI chips. “It’s hard to see significant upside due to capacity constraints at TSMC,” said Jay Goldberg of Seaport Research Partners.
Nvidia could also see growth from renewed access to China. CEO Jensen Huang recently expressed optimism that China will approve the sale of the powerful H200 AI chip, a move that could expand the company’s sales in the region. AMD similarly adjusted its AI chip sales forecasts after securing licenses to ship certain processors to China.
Analysts project an adjusted gross margin of 75% for the fourth quarter, up more than one percentage point from a year ago, with pricing power and pre-secured memory allocations insulating Nvidia from potential supply shocks.
