Nvidia posted another record quarter, reporting fiscal Q4 revenue of $68.1 billion, up 73% year over year, with earnings per share of $1.62, both topping analyst estimates. Data center revenue surged to $62.3 billion, more than 90% of total sales. The company forecast first-quarter revenue near $78 billion, far above Wall Street’s expectations.
Yet, despite these remarkable figures, Nvidia’s stock tumbled 5.5% on Thursday — its sharpest single-day drop since April — as investors chose to “sell the news.” Analysts pointed to growing concerns about reliance on a handful of hyperscale clients, with nearly half of Nvidia’s revenue tied to Microsoft, Meta, Amazon, and Alphabet.
Market watchers note the irony: Nvidia’s dominance in AI computing remains unchallenged, but investors increasingly question whether its customers’ massive AI spending can continue without clear returns. CNBC’s Jim Cramer put it bluntly: the market isn’t doubting Nvidia’s leadership, but “its customers’ profitability horizon.”
The broader tech sector followed suit. The Nasdaq Composite sank 2.3%, the S&P 500 lost 0.5%, and semiconductor peers including Broadcom, Lam Research, and Applied Materials closed lower as traders reassessed lofty AI valuations.
Block Cuts 4,000 Jobs in AI-Driven Restructuring
Meanwhile, fintech powerhouse Block announced a sweeping restructuring that will eliminate 4,000 jobs, nearly half its workforce, in response to evolving AI strategies. The layoffs came alongside fourth-quarter results showing $6.25 billion in revenue and adjusted earnings per share of $0.65, roughly matching forecasts, with gross profit up 24% year over year.
CEO Jack Dorsey said the move aims to rebuild the company around leaner, more productive teams enhanced by artificial intelligence rather than human scale.
“We’re not making this decision because we’re in trouble. Our business is strong,” Dorsey wrote in a letter to shareholders, calling advances in AI “a structural shift” that demands action sooner rather than later.
He added that most companies would face a similar decision within a year, saying, “I don’t think we’re early to this realization — I think most are late.”
CFO Amrita Ahuja emphasized that the reorganization will enable Block to “move faster with smaller, highly talented teams using AI to automate more work.” Markets welcomed the announcement, with Block shares surging 20% after hours. The company expects $450–500 million in restructuring costs, primarily incurred in the first quarter.
Global Market Reaction
The shockwaves extended across global markets. In Asia, Japan’s Nikkei 225 edged up 0.1%, but South Korea’s Kospi fell after declines in leading chipmakers Samsung Electronics and SK Hynix. SoftBank Group dropped more than 3%, weighed down by profit-taking in technology names.
European markets, which had soared earlier in the week to record highs, held steady but traded cautiously. Analysts say Nvidia’s and Block’s announcements encapsulate the AI era’s dual nature: explosive productivity on one side, deep structural disruption on the other.
As Dorsey summarized in his shareholder note, “I’d rather get there honestly and on our own terms than be forced into it reactively.” The sentiment reflects a broader reckoning across industries — one that’s testing whether the AI boom can deliver both innovation and stability without leaving thousands behind.
