Here’s the $200 Billion Reason Wall Street Is Nervous for NVIDIA’s Earnings

By Jordan Chussler Updated Feb 25, 11:13AM EST · Published Feb 24, 10:30AM EST

Quick Read

Nvidia (NVDA) faces Amazon (AMZN) spending $200B in 2026 on infrastructure while Amazon develops competing Trainium2 chips.
Nvidia Data Center revenue reached $51.2B in Q3 representing 89.8% of total revenue.
Nvidia outperformed EPS expectations for eight straight quarters but beat margins narrowed from 11.93% to 4.84%.

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Here’s the $200 Billion Reason Wall Street Is Nervous for NVIDIA’s Earnings — © Canva

NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) reports quarterly earnings after the bell tomorrow, Feb. 25, and the number setting the stakes is not one of its own. When Amazon (NASDAQ:AMZN) announced a massive capital expenditure plan for 2026 during its recent earnings call, the market reacted with immediate anxiety. Amazon shares fell sharply in after-hours trading following the announcement, according to Reuters. The number crystallized a tension that now hangs directly over Nvidia’s report: hyperscaler AI spending at this scale is both NVIDIA’s biggest tailwind and its most scrutinized risk.

What the $200 Billion Signals

Amazon’s 2026 CapEx commitment reflects a significant year-over-year increase and an industry-wide infrastructure arms race that has been NVIDIA’s primary growth engine. The company’s most recent quarter underscored the dependency: Data Center revenue hit $51.2 billion in Q3 FY2026, representing 89.8% of total revenue, with networking alone up 162% year-over-year. The problem is that Amazon is simultaneously building out custom Trainium2 chips, raising questions about whether the next wave of hyperscaler spending flows to Nvidia at the same rate.

What Nvidia Guided and What’s Expected

For Q4 FY2026, Nvidia guided for revenue of $65 billion, plus or minus 2%, with non-GAAP gross margins of 75%. That would represent roughly 14% sequential growth from Q3’s $57 billion in revenue. NVIDIA has beaten EPS estimates in each of the last eight consecutive quarters, with an average surprise of 7.46%. But those margins of outperformance have been narrowing, from 11.93% in Q1 FY2024 to 4.84% in Q3 FY2026, suggesting Wall Street is getting closer to the company’s actual trajectory.

Where the Stock Stands

Nvidia shares are trading at $190.80 as of this morning, up 2.04% year-to-date and 46% over the past year. The stock carries a market cap of $4.62 trillion. Prediction markets on Polymarket currently price a 93% probability that NVIDIA beats earnings tomorrow, yet only a 25% probability the stock closes above $200 by month’s end. That gap tells the story: The beat is expected, which raises the bar for what actually moves the stock higher. The CBOE Volatility Index sits at 21.01, up 30.6% over the past month, placing it in elevated uncertainty territory heading into the print.

What to Watch Tomorrow

Beyond the headline numbers, key metrics to watch include gross margin guidance for Q1 FY2027. NVIDIA flagged gross margin compression risk during the Blackwell architecture transition, and any forward guidance that suggests margins will soften below the 75% range could overshadow an otherwise strong quarter. Inventory levels, which rose to $19.8 billion from $15 billion sequentially, will also draw scrutiny. CEO Jensen Huang’s commentary on Blackwell demand and the pace of hyperscaler commitments will likely matter as much as the numbers themselves.

About the Author Jordan Chussler →

Jordan specializes in a wealth of finance topics, ranging from traditional equities, income investment vehicles and alternative assets to retirement savings, debt-based fixed-income securities and commodities, with a specific focus on gold and other precious metals. He takes pride in combining his personal interests and professional experience in finance and education to help readers increase their financial literacy and make better investment choices. Jordan has worked in digital publishing for 17 years after graduating from Lynn University as a member of both the Kappa Delta Pi International Honor Society and the U.S. Achievement Academy's All-American Scholar Program. He is the investing and banking editor for Money and previously served as managing editor of Weiss Ratings. As a contributing writer for BetterInvesting Magazine, Jordan covered topics focused on the fundamentals of investing, technical and fundamental analysis, mutual funds, debt securities, dividend investing, retirement savings strategies and passive income generation. His bylines can be seen at Nasdaq.com, Apple News, Money, MSN, BetterInvesting Magazine, Money Crashers, TipRanks, the Miami Herald and a dozen other newspapers.