Nvidia reported fiscal Q4 2026 results after Wednesday’s close, beating Wall Street estimates. Shares rose more than 3% after the release.
Adjusted EPS was $1.62, $0.08 above consensus, and revenue was $68.13 billion, $1.9 billion above expectations. Revenue rose 20% quarter on quarter and 73% year on year.
Key Segment Performance
Data Centre revenue was $62.3 billion, up 22% from Q3 and 75% from a year earlier. Non-GAAP gross margin was 75.2%, matching the company’s stated target.
For fiscal Q1 2027, Nvidia forecast revenue of $78 billion, above the $72 billion consensus estimate. The company also referenced growing demand for AI computing and enterprise use of AI agents.
Salesforce reported a top-line beat, with revenue in line with analyst expectations. Shares fell 4% initially in after-hours trading.
Snowflake shares dropped 3% after a narrow beat versus consensus. The Trade Desk fell over 14% after its Q1 revenue outlook came in $10 million below consensus.
Options Strategy Considerations
With Nvidia’s massive earnings beat, the artificial intelligence trend is clearly accelerating, not slowing down. However, the stock’s relatively muted 3% rise suggests a significant amount of this good news was already priced in by the market. This “sell the news” reaction means traders should be more strategic than simply buying calls.
The extreme implied volatility we saw leading into this report is now set to decline sharply, a phenomenon known as “volatility crush.” This creates a favorable environment for selling options premium, such as short-term, out-of-the-money put credit spreads. This strategy allows traders to collect income while betting that NVDA will not fall significantly in the coming weeks.
A clear divergence is happening in the tech sector, as shown by the negative reactions to Salesforce and Snowflake despite their own earnings beats. The market is now punishing anything less than perfection, concentrating its capital in the undisputed leader. This sets up a potential pairs trade: going long Nvidia options while simultaneously buying puts on a broader tech ETF like the QQQ to hedge against sector-wide weakness.
Looking back, the massive run-up in NVDA stock during 2025 set incredibly high expectations. We saw call option volume leading into the report consistently exceed 2 million contracts daily, showing just how crowded the bullish trade had become. This saturation of buyers helps explain why such a powerful earnings beat resulted in a modest initial stock move.
Even with this stellar report, NVDA’s forward price-to-earnings ratio remains above 35, a valuation that still hinges on flawless execution. The market remains sensitive to the interest rate environment we’ve been navigating since late 2025, meaning any unexpected macro news could still pressure even the strongest stocks. Therefore, any bullish derivative positions should have clearly defined risk.
Given the strong guidance for the next quarter, bullish positions are still warranted, but they should be structured to be cost-effective. A call debit spread, which involves buying a call option and selling another at a higher strike price, offers a way to bet on further upside. This strategy lowers the upfront cost and benefits from the ongoing strength in the core data center business.
