Earnings reports can swing fortunes overnight, and we saw a study in contrasts last week Nvidia (NASDAQ:NVDA) unveiled its third-quarter fiscal 2026 results last Wednesday after the market closed, posting record revenue of $57 billion — a 22% jump from the prior quarter and 62% year-over-year surge, fueled by unrelenting AI chip demand. Yet, despite crushing expectations, Nvidia’s shares dipped about 4% in the days following, and continue to slide this morning amid broader tech sector jitters.
The next day, Walmart (NYSE:WMT) dropped its own strong numbers before the market opened, with revenue hitting $179.5 billion, up 6% year-over-year, and e-commerce soaring 27%. Walmart stock has responded with a greater than 4% rally, and it is pushing higher again today as investors seek stability.
This tale of two reports highlights how even blowout results don’t guarantee applause — context and sentiment rule the day.
Nvidia’s Power Surge Meets Skeptical Eyes
Nvidia’s Q3 was a testament to its AI dominance. Data center revenue — the engine of its growth — topped $51 billion, a 66% surge from last year, with gross margins narrowing slightly to 73.4% from 74.6% a year ago (but higher than Q2).
CEO Jensen Huang dismissed “AI bubble” chatter, emphasizing sovereign AI investments and Blackwell chip ramps. Guidance for Q4 pointed to continued acceleration, with analysts raising their earnings expectations to $1.52 per share from $1.42, which is 12% above last year. On paper, it was a smashing success, but the market yawned, then dropped the stock.
Walmart’s Steady Climb Wins Hearts
Walmart, meanwhile, delivered reliable gains. While U.S. comparable sales growth eased back to 4.5% from 5.3% last year, e-commerce sales jumped 27% globally, with every single segment enjoying better than 20% gains. Of particular note were the strong gains Walmart made in advertising, with sales rocketing 53% following its Vizio acquisition last December. Even without Vizio, Walmart saw a 33% jump in Walmart Connect revenue.
Operating income also climbed, with adjusted earnings of $0.62 per share beating forecasts by $0.02, letting the retailer raise full-year revenue and EPS guidance, citing resilient consumer spending on essentials. It wasn’t a flashy performance, but it was consistent — exactly what investors crave in uncertain times.
Bubble Fears vs. Safe Haven Appeal
So why the split reaction? Nvidia’s fall stems from exhaustion after a meteoric run. Shares had surged over 171% in the prior year, inviting profit-taking and valuation worries. At a forward P/E near 24, it’s not excessive for the industry leader, but investors remain concerned about AI hype fatigue despite Huang’s assurances.
Broader Nasdaq weakness, tied to economic uncertainty, didn’t help. Investors seem to question if Nvidia’s growth can sustain without a cooldown.
Walmart’s rise, by contrast, reflects its defensive allure. In a wobbly economy, consumers flock to value plays, and the retailer’s low-price leadership shines. Its P/E hovers around 37, still digestible, with e-commerce gains signaling adaptation without overreliance on tech froth. The report reinforced Walmart as a recession buffer, drawing inflows from risk-averse funds. Essentially, the market rewarded predictability over potential.
For most portfolios, Walmart makes the smarter buy today. Its blend of modest growth (projected 4% to 5% annually) and a 0.9% dividend yield offers ballast against volatility. Nvidia is tempting with explosive upside potential, but its beta of 2.3 means wild swings (Walmart at 0.6 shows its steadiness).
If you’re a long-term, growth-hungry investor, Nvidia is a good fit. For balanced stability, though, Walmart prevails as its lower risk profile suits conservative allocations amid current headwinds.
Key Takeaways
Both Nvidia and Walmart stand as solid picks for buy-and-hold investors. Nvidia promises explosive price appreciation as AI reshapes industries, potentially delivering multibagger returns over a decade.
Walmart, however, provides slower but steadier growth, underpinned by everyday demand, plus reliable income via its dividend — ideal for compounding without the rollercoaster. In portfolios, they complement each other: Play Nvidia for offense, Walmart for defense.