Nvidia's Q4 earnings failed to enthuse investors: What IT firms should expect amid AI-led disruption concerns
Nvidia is the largest stock in the US market by value with a market cap of $4.49 trillion. But on Thursday, it alone accounted for more than four-fifths of the S&P 500's loss.
- Feb 27, 2026,
- Updated Feb 27, 2026 5:13 PM IST
Nvidia shares came under selling pressure amid high market volatility and AI disruption fears on Thursday despite a strong set of Q4 earnings. The IT stock closed 5.46% lower at $184.89 on Nasdaq. The negative sentiment in the Nvidia stock spilled onto other IT stocks.
The Nasdaq 100 Technology Sector index slipped 88 pts to close at 12,448. The Dow Jones US Technology Index gave up 139 pts to close at 8493.52. Nvidia is also a component of Dow Jones and S&P 500.
Nvidia is the largest stock in the US market by value with a market cap of $4.49 trillion. But on Thursday, it alone accounted for more than four-fifths of the S&P 500's loss. The index ended 37 pts lower at 6,908.
According to analysts, the stock correction occurred as markets may already have priced in consistent earnings beat. This was the fourteenth consecutive quarter of beating revenue estimates for the US-based firm.
Ken Mahoney, CEO at Mahoney Asset Management, told Investing dot com that a great deal of optimism had already been priced into the stock ahead of the announcement.
Commenting on the market's reaction to earnings, Nvidia CEO Jensen Huang said investors might be missing how large the computing industry could become, and how much Nvidia is set to grow with it. Expressing hopes of a strong growth, Huang said investors would change their tune back in Nvidia's favour, eventually. “The market can't hold us back forever,” Huang told CNBC in an interview.
On the recent crash in IT stocks, Huang said markets miscalculated the AI threat to software companies. Instead, Huang expects software firms to use agentic AI to develop their software and boost efficiency.
The stellar Nvidia earnings came amid a broad selloff that reflects a broader shift in the market sentiment.
Concerns over growing competition, customer concentration risks and uncertainty over the long-term outlook of AI infrastructure spending hurt investor sentiment around the global leader in AI computing.
Nigel Green, CEO of global financial advisory giant deVere Group, said, "For the remainder of this year at least, this sets the tone: exceptional growth is expected, not rewarded. Investors are no longer going to buy exposure to AI at any price."
On the earnings outlook of global firms, Green said, “Investors want line-of-sight on earnings durability and balance sheet strength. They’re evaluating AI companies as mature cash-generating enterprises, not early-stage disruptors.”
Morgan Stanley equity strategist Joseph Moore in a note said, "For about the 5th time in the last 3 years, there appear to be generalist concerns that growth will slow, despite near-term acceleration and the clear increase in model usage that is starting to have a major impact on productivity."
Nvidia shares came under selling pressure amid high market volatility and AI disruption fears on Thursday despite a strong set of Q4 earnings. The IT stock closed 5.46% lower at $184.89 on Nasdaq. The negative sentiment in the Nvidia stock spilled onto other IT stocks.
The Nasdaq 100 Technology Sector index slipped 88 pts to close at 12,448. The Dow Jones US Technology Index gave up 139 pts to close at 8493.52. Nvidia is also a component of Dow Jones and S&P 500.
Nvidia is the largest stock in the US market by value with a market cap of $4.49 trillion. But on Thursday, it alone accounted for more than four-fifths of the S&P 500's loss. The index ended 37 pts lower at 6,908.
According to analysts, the stock correction occurred as markets may already have priced in consistent earnings beat. This was the fourteenth consecutive quarter of beating revenue estimates for the US-based firm.
Ken Mahoney, CEO at Mahoney Asset Management, told Investing dot com that a great deal of optimism had already been priced into the stock ahead of the announcement.
Commenting on the market's reaction to earnings, Nvidia CEO Jensen Huang said investors might be missing how large the computing industry could become, and how much Nvidia is set to grow with it. Expressing hopes of a strong growth, Huang said investors would change their tune back in Nvidia's favour, eventually. “The market can't hold us back forever,” Huang told CNBC in an interview.
On the recent crash in IT stocks, Huang said markets miscalculated the AI threat to software companies. Instead, Huang expects software firms to use agentic AI to develop their software and boost efficiency.
The stellar Nvidia earnings came amid a broad selloff that reflects a broader shift in the market sentiment.
Concerns over growing competition, customer concentration risks and uncertainty over the long-term outlook of AI infrastructure spending hurt investor sentiment around the global leader in AI computing.
Nigel Green, CEO of global financial advisory giant deVere Group, said, "For the remainder of this year at least, this sets the tone: exceptional growth is expected, not rewarded. Investors are no longer going to buy exposure to AI at any price."
On the earnings outlook of global firms, Green said, “Investors want line-of-sight on earnings durability and balance sheet strength. They’re evaluating AI companies as mature cash-generating enterprises, not early-stage disruptors.”
Morgan Stanley equity strategist Joseph Moore in a note said, "For about the 5th time in the last 3 years, there appear to be generalist concerns that growth will slow, despite near-term acceleration and the clear increase in model usage that is starting to have a major impact on productivity."