1. Nvidia reports Q4 FY2025 revenues of $39.33B, exceeding estimates by $1.1B. 2. Data Center business drives performance with 93% y/y revenue growth. 3. Gross margins are expected to contract to 71% in Q1 FY2026. 4. Nvidia rated 'Hold' at $130 per share due to low CAGR expectations. 5. Technical momentum for NVDA suggests need for consolidation before a 'Buy' rating.
While revenues beat estimates, contracting gross margins and a 'Hold' rating signal caution. Historically, stocks with declining margins face downward pricing pressure, as seen with other tech firms in similar situations.
The article highlights significant revenue growth but also important contraction in margins, affecting NVDA's attractiveness. The dual nature of the report suggests mixed sentiment among investors, influencing price behavior.
The immediate implications of declining margins may reflect in short-term trading behavior, as investors reassess valuation. Similar situations have led to short-term corrections in tech stocks previously.