Nvidia smashes earnings, why muted market reaction?
In One Chart: Can Nvidia Break the Sell-the-News Pattern
Global AI chip leader $NVIDIA (NVDA.US)$ is set to release its FY26Q4 earnings after the bell on February 25. With the market currently buzzing with the "AI CapEx Bubble" narrative, this report is capturing worldwide attention. The core focus remains on the volume ramp-up of the GB300, mass production progress of Vera Rubin, and whether the company can provide strong guidance for growth in the coming quarter.
What the trading history says
This chart tells a simple story. Nvidia's earnings day fireworks have faded, while post-earnings drift has turned more negative.
From FY24Q1 through FY24Q4, earnings day moves averaged about 9.5%, helped by a 24% surge in FY24Q1 and a 16% jump in FY24Q4. Since FY25Q2, earnings day moves have compressed to low single digits on average, and the stock has been down in the five sessions after earnings in five of the last six quarters, averaging roughly a 5.8% decline.
That backdrop matters heading into FY26Q4. The stock has posted two consecutive sell-the-news reactions after earnings, and the market's default stance looks less like chase the beat and more like demand proof, then take profits.
This quarter's three key watchpoints
Data center volume and the GB300 to Rubin handoff
Nvidia's mix is now overwhelmingly about data centers: the market is looking for data center revenue of $59.8B this quarter (+68% YoY, +17% QoQ) versus gaming at about $4.0B. The near-term question is whether GB300 meaningfully accelerates both compute and networking momentum, especially after management said inventory rose from $15.0B to $19.8B last quarter to support the ramp. The bigger 2026 swing factor is still Vera Rubin, and recent HBM4 signals from SK hynix, Samsung, and $Micron Technology (MU.US)$ raise the stakes for any management update on Rubin timing.
Guidance, not the quarter, is likely the real catalyst
Nvidia has a history of outperforming its own guidance, and when consensus sits close to the prior guide, a beat is possible. But given the recent "sell-the-news" pattern, investors may care even more about the next print: Street expectations for FY27Q1 are $71.53B of revenue (+62% YoY) and $40.62B of non-GAAP net income (+104% YoY). If Nvidia can guide above that bar and sound confident about supply, that is the cleanest way to change the post-earnings tape.
Gross margin under memory inflation and the next cabinet cycle
The margin debate is back as memory pricing tightens, and investors want to know whether higher HBM costs start to pressure Nvidia's gross margin trajectory. The other layer is cycle execution: FY25 saw margin skepticism tied to the Blackwell ramp, and the market is watching whether the Rubin cabinet ramp in FY27 creates another temporary margin dip or a smoother transition than the last cycle. Management's framing here will matter as much as the headline margin number.
Option market signals
Ahead of Nvidia's highly anticipated earnings report, the options market is signaling cautious optimism with a put/call ratio of 0.84 across a massive 14.6 million contracts in total open interest, reflecting a modest tilt toward bullish positioning in the AI chip titan. Implied volatility sits at 55.05%, well above the 37.90% historical volatility and ranking at the 77th percentile, indicating traders are bracing for a significant move as the Street awaits updates on data center demand and Blackwell chip ramp progress.
On the February 27 weekly expiration, call volume is clustered heavily in the $192.5 to $210 strike range with peak activity exceeding 69,000 contracts, while open interest on the call side is concentrated around the $195 to $210 strikes with the largest position topping 108,000 contracts, suggesting institutional players are positioning for a potential upside breakout should Jensen Huang deliver another blowout quarter that reaffirms Nvidia's dominance in the accelerated computing arms race.
Summary
Nvidia is trading under louder narratives around export headlines, in-house substitution, and short interest, but the stock's recent earnings tape shows what really matters: the bar is high, and post-earnings follow-through has been weak.
For FY26Q4, the cleanest way to reverse that pattern is repeated proof. That means GB300 volume accelerating, Rubin timing staying intact, and guidance for FY27Q1 strong enough to convince investors that the next leg of data center scaling is still ahead.
Check out moomoo's past insights on Nvidia:
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.Read more
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