Morgan Stanley raises NVIDIA's target price to $260! Q4 revenue soars 73% to a record, and Q1 outlook exceeds expectations

NVIDIA announces FY2026 Q4 financial report, with revenue reaching $68.1 billion, up 73% year-over-year. Data center business alone hit a record $62.3 billion in a single quarter. After the earnings release, Morgan Stanley raised its target price from $250 to $260, and RBC also increased its target from $240 to $250.
(Background: The New York Times reports CIA secret meetings with Jensen Huang and Apple’s Tim Cook: China’s 2027 plan to attack Taiwan, US GDP could decline by 11%)
(Additional context: Jensen Huang’s speech: “Problems” in the AI era are worth a thousand times more than answers; don’t use Excel to calculate returns; Physical AI will break barriers)

NVIDIA released its FY2026 Q4 financials on February 25, surpassing all Wall Street expectations across the board. According to the official announcement, Q4 revenue reached $68.1 billion, a 73% increase from the same period last year and a 20% growth from the previous quarter, setting a new record. Non-GAAP EPS was $1.62, higher than the market estimate of $1.53.

Following the earnings report, two major investment banks increased their bullish outlooks: Morgan Stanley raised its target price from $250 to $260, and RBC Capital Markets raised theirs from $240 to $250, both maintaining a “Buy” rating.

Data Center Revenue of $62.3 Billion in a Single Quarter, Blackwell Dominates Reasoning Market

Breaking down the business, the data center segment remains the main driver, with quarterly revenue of $62.3 billion, up 75% year-over-year and 22% quarter-over-quarter, accounting for over 91% of total revenue. The full-year data center revenue reached $193.7 billion, up 68%, reflecting sustained demand from global hyperscale cloud providers for AI computing power.

CEO Jensen Huang stated during the earnings call:

Grace Blackwell paired with NVLink is the king of inference today, reducing the cost per token by an order of magnitude.

He also previewed the next-generation Vera Rubin platform, which will further reduce inference costs to one-tenth of Blackwell’s, continuing to solidify NVIDIA’s dominance in AI infrastructure.

Q1 Outlook of $78 Billion, Far Surpassing Market Expectations

What excites Wall Street even more is the forward guidance: NVIDIA expects FY2027 Q1 revenue to reach $78 billion (±2%), well above the consensus estimate of $72.6 billion, indicating that the AI spending cycle is still accelerating rather than peaking. Non-GAAP gross margin is expected to remain at 75.0% (±50 basis points), with operating expenses around $7.5 billion.