Feb 28 - Nvidia (NVDA, Financial) shares plunged more than 8% on Thursday as profit-taking and margin concerns overshadowed its robust fourth-quarter performance. The chipmaker reported adjusted earnings per share of $0.89 for the three months ended Jan. 26, up from $0.81 a year earlier, while revenue surged to $39.3 billion, an increase of 78% year over year.

• Warning! GuruFocus has detected 3 Warning Signs with NVDA.

The data center segment of Nvidia reported a profitable $35.6 billion revenue increase of 16% during the quarter while surpassing analysts' projections. The market reacted abruptly because investors were concerned about margin compression during the Blackwell technology chip production phase.

First-quarter fiscal 2026 revenue for the company will range between $43 billion and $43 billion in addition to anticipated gross margins of approximately 70.6%. This reflects a decline from the previous year's 75%. The positive market outlook for demand challenges Nvidia's ability to maintain profits during its competitive market battle with Chinese manufacturers.

The massive one-day decline of Nvidia represents its biggest market loss since earlier period market fluctuations showing that investors remain wary about current technology market volatility. Investors anticipate additional product margin information as well as market trends updates because of increasing industry competition.