This Figure Will Determine if Nvidia's Fourth Quarter and Fiscal 2027 Outlook Are a Success or Failure -- and It's Not Sales or Profits

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};ge("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat($n)),notifLabel:document.querySelector(".".concat(Xn))};t.notifDropdown&&so(e,t)}))}()}};]]>Sean Williams, The Motley FoolWed, February 25, 2026 at 10:26 AM GMT+1 4 min readThe big day for Wall Street has officially arrived! Following the closing bell today (Feb. 25), Nvidia (NASDAQ: NVDA) will release its highly anticipated fiscal 2026 fourth-quarter operating results (ended Jan. 25, 2026) and likely provide operating guidance for fiscal 2027.Nvidia has quickly become the face of the artificial intelligence (AI) revolution, with its graphics processing units (GPUs) holding a virtual monopoly in enterprise data centers. As a result, shares of the company have skyrocketed by approximately 1,200% since the start of 2023. Handily exceeding consensus sales and profit forecasts from Wall Street analysts has been the norm.Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »Image source: Nvidia.While there's a high probability that Wall Street's largest publicly traded company will leap past consensus estimates, yet again, there's another operating metric that investors should be using to determine if Nvidia's fourth-quarter performance and fiscal 2027 outlook are a success or failure: gross margin.Nvidia has had two core factors working in its favor. First, its Hopper (H100), Blackwell, and Blackwell Ultra GPUs offer superior compute capabilities relative to its external competitors, such as Advanced Micro Devices. Customers are often willing to pay a premium for a superior product.Secondly, demand for GPUs (as a whole) has substantially outweighed their available supply. Even with Taiwan Semiconductor Manufacturing ramping up its monthly chip-on-wafer-on-substrate capacity at a rapid pace, there aren't enough GPUs to satisfy demand. This supply demand dynamic has fueled strong pricing power for Nvidia.The rise of AI has catapulted Nvidia's gross margin from the low-to-mid 60% range to an estimated 74.8%, based on generally accepted accounting principles (GAAP), for the fiscal fourth quarter.Nvidia's GAAP gross margin should be the headline figure of its fourth-quarter report and full-year outlook because it cuts right to the most important question: Does Nvidia still have exceptional pricing power?If the company's GAAP gross margin guide for fiscal 2027 remains in the 74% to 75% range (if not higher), it signals that clients are still paying top dollar for the upcoming Vera Rubin GPU, as well as Blackwell Ultra. This would be a success and indicate the potential for additional upside in Nvidia stock.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,906.78 -39.35 (-0.57%)Dow 3049,498.24 +16.09 (+0.03%)Nasdaq22,862.51 -289.57 (-1.25%)Russell 20002,667.43 +4.11 (+0.15%)VIX18.81 +0.88 (+4.91%)Gold5,205.30 -20.90 (-0.40%)Trending tickersNVDA NVIDIA Corporation 185.52 -10.10 (-5.16%)EOSE Eos Energy Enterprises, Inc. 6.99 -4.14 (-37.24%)IONQ IonQ, Inc. 41.74 +8.15 (+24.26%)AI C3.ai, Inc. 8.39 -1.92 (-18.62%)AVGO Broadcom Inc. 316.31 -16.00 (-4.81%)PortfolioSign in to access your portfolioSign inTop gainersINSP Inspire Medical Systems, Inc. 79.11 +19.86 (+33.52%)SEZL Sezzle Inc. 82.70 +20.08 (+32.06%)IONQ IonQ, Inc. 41.56 +7.97 (+23.73%)LMAT LeMaitre Vascular, Inc. 112.78 +21.40 (+23.42%)HPP Hudson Pacific Properties, Inc. 7.67 +1.31 (+20.60%)Top losersEOSE Eos Energy Enterprises, Inc. 6.97 -4.16 (-37.42%)ACMR ACM Research, Inc. 55.72 -12.75 (-18.62%)FOUR Shift4 Payments, Inc. 47.88 -9.49 (-16.55%)CHE Chemed Corporation 392.03 -74.57 (-15.97%)FSK FS KKR Capital Corp. 11.30 -2.02 (-15.20%)Most activeNVDA NVIDIA Corporation 185.38 -10.25 (-5.24%)EOSE Eos Energy Enterprises, Inc. 6.97 -4.16 (-37.42%)NU Nu Holdings Ltd. 15.27 -1.38 (-8.29%)PLUG Plug Power Inc. 1.8585 -0.0515 (-2.70%)AAL American Airlines Group Inc. 14.01 +0.69 (+5.21%)Top economic eventsEarnings eventsMy earnings eventsEarnings events