When global chip giant Nvidia once again hands over that "perfect" report card, Wall Street's reaction is akin to a meaningful sigh. On February 27, East 8 Time, after Nvidia disclosed its fourth-quarter earnings for fiscal year 2026 that far exceeded expectations, the market did not give it the customary flowers and applause but, instead, responded with a drop in share prices.
This indifference intertwines with the violent fluctuations of Bitcoin on that day, together sketching out the complex mentality of current risk asset investors: After the feast has lasted too long, the market's pricing of "perfection" is becoming unprecedentedly harsh.
1. Digital Frenzy and Sorrow in Share Prices: That "Not Sufficiently Surprising" Surprise
● Looking solely at the financial report data, Nvidia's performance is almost impeccable.
○ In the fourth quarter of fiscal year 2026, the company's total revenue reached $68.1 billion, a year-over-year increase of 73%, far exceeding the market expectation of $66.2 billion;
○ The data center business, as the main engine of growth, contributed $62.3 billion, also crushing analysts' expectations.
○ Even more astonishing, Nvidia's revenue guidance for the next quarter was set at around $78 billion, a figure not only higher than the Wall Street average expectation of $72.8 billion but also touching the upper limit of some of the most aggressive bulls.
● However, the capital market's reaction was exceptionally cold. In after-hours trading following the earnings release, Nvidia's stock price temporarily surged nearly 4% before plummeting rapidly, ultimately turning negative. In the subsequent trading days, the downward trend became evident, with the stock price once dropping over 5%, and its market value evaporating by approximately $259.2 billion (about 1.77 trillion yuan), marking the largest single-day drop in nearly a year.
● Goldman Sachs commented that this "good news exhausted" drama is behind a typical "sell the fact" market sentiment and profit-taking mentality. For a company that has exceeded expectations for fourteen consecutive quarters, merely "beating expectations" has become as natural as breathing, no longer serving as a catalyst for stock price increases. Investors want to see not just how good it can get, but "how much better can it get" and "how long can it last."
2. The Hidden Reefs Behind Prosperity: What Is the Market Really Worried About?
The surface of glamorous data cannot conceal the deep-rooted questioning of sustainability within the market. This doubt mainly focuses on two aspects:
1. Structural Fragility Due to Overreliance on a Single Engine.
● Although the data center business is booming, accounting for over 91% of total revenue, other segments of Nvidia are showing signs of fatigue.
● Gaming business revenue was $3.73 billion, far below the expected $4.01 billion; automotive-related businesses also did not meet expectations. This structural differentiation has heightened market sensitivity—if the "golden patrons" of AI cut back on spending, Nvidia will face a situation with no safety net.
2. Concentration of Customers and Concerns about "Internal Circulation."
● Jensen Huang mentioned in the conference call that the top five cloud service providers and hyperscale customers contributed slightly more than 50% of the company's data center revenue.
● This highly concentrated customer structure has made the market begin to worry about the quality of demand. When giants like Microsoft, Google, and Meta are not only Nvidia's biggest buyers but also direct competitors in the AI sector, whether their massive capital expenditures can continue to translate into end revenues has become a heavy stone hanging over investors' heads.
● Goldman Sachs also pointed out that the market's concerns about the sustainability of AI capital expenditures among hyperscale cloud service providers are intensifying, predicting that AI expenditure growth will slow to 62% in 2026, down from 73% in 2025.
3. Supply Bottlenecks and Client "Rebelliousness": Growth Stories Face Challenges
If the doubts on the demand side are long-term concerns, then the constraints on the supply side are short-term fears.
● Nvidia's CFO Colette Kress admitted that although the company has locked in key supplies through long-term agreements until 2027, the global memory chip shortage is driving up costs and affecting equipment shipments, especially in the gaming business where supply constraints will become an insurmountable barrier in the short term.
● What may be more pressing for Nvidia is the sudden "heartbeat" of its major customers. Just before and after the earnings report, Meta Platforms not only announced it would deploy "millions" of Nvidia processors in the coming years but also finalized a five-year strategic partnership with AMD.
● Meta plans to deploy data center equipment worth billions of dollars based on AMD processors, even planning to purchase as much as 10% of AMD's shares. At the same time, Anthropic also announced it would deploy up to 1 million Google-developed TPU chips.
● This strategy of "playing both sides" and even "self-developed alternatives" is eroding the moat Nvidia has built over the years. Although Nvidia's dominant position is difficult to shake in the short term, the various efforts by clients to reduce dependence on a single supplier and enhance their bargaining power are sending a clear signal to the market: the AI arms race may be intense, but no one is willing to be "choked" by a single player forever.
4. Bitcoin's "Empathy": A Barometer of Risk Appetite
Interestingly, Nvidia's stock price movement resonated subtly with Bitcoin at that time.
● Before the earnings release, buoyed by the overall recovery of risk asset sentiment, Bitcoin surged and reclaimed above $68,000, even approaching $70,000 on February 25. Data from CoinGlass shows that large-scale short liquidations in the crypto market, coupled with about $257.7 million in funds flowing back into spot Bitcoin ETFs, injected strong momentum into the market.
● However, when Nvidia's stock price turned downward post-earnings, Bitcoin also followed suit and entered a period of volatility. On February 27, Bitcoin dropped alongside tech stocks, at one point declining over 2%, reporting $67,507 each, with over 130,000 people liquidated across the network. Analysts from crypto data company Kaiko commented that the crypto market is still following the sentiment of tech stocks, and this rebound often lacks sufficient support, making the pullback unsurprising.
● Matt Hougan, the Chief Investment Officer at Bitwise Asset Management, summed it up bluntly: "the end of the crypto winter does not conclude with excitement, but rather with indifference." This sentiment applies to Nvidia's current state as well. When the market shows "indifference" toward the hottest assets, it indicates that risk appetite is at a delicate balance—unwilling to step back and miss the feast but also hesitant to fully embrace the celebration.
5. Conclusion: When "Belief" Meets "Valuation"
● After years of AI frenzy, the market is struggling to transition from the "storytelling" phase to the "performance watching" phase. Jensen Huang emphasizes that customers are making money with added computing power and investments will remain high; the CFO promises that delivery schedules extend to 2027. While these optimistic narratives sound delightful, in the face of a market value exceeding $2 trillion, what investors require are stronger evidence, more certain cash flows, and more diversified risks.
● For Bitcoin, its synchronous resonance with Nvidia reveals a harsh reality: against the backdrop of tightening macro liquidity and slowing growth expectations, even the most rebellious digital assets cannot entirely escape the "commonwealth" with traditional risk assets.
● Whether it is the king of AI chips or digital gold, after investors' "inherent high expectations" have been raised to new heights, even the slightest wind or grass movement could trigger a violent reconstruction of valuations. What the market currently desires most is a stronger guarantee about the "future" that can pierce through the fog.
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