Nvidia’s Blowout and Retail’s Resilience in the Last Big Week for Q4 Earnings

Takeaways

Blowout reports from NVDA and retailers such as HD and TJX boosted Q4 EPS growth
Despite uncertainty swirling around US trade policy and AI, American CEOs remain confident on future growth
Next week, 1,068 companies are expected to report, including results from CrowdStrike, Ross Stores, Abercrombie & Fitch, Gap and more

Trade Risk Returns Just as Retailers Begin to Report

With over 90% of S&P 500^® earnings reported, the season wraps up next week with a final trickle of retail names. Overall it was a great season for these large cap names, with EPS growth topping 13%, the fifth consecutive quarter of double digit growth, and revenue growth of 9%.¹ Will those types of growth numbers continue in 2026, especially now that trade risk seems to be back on the table?

After the Supreme Court struck down President Trump’s 10% global tariff on February 20, he bypassed the ruling by invoking Section 122 of the 1974 Trade Act to impose a statutory maximum 15% surcharge.² This "balance-of-payments" authority is limited to 150 days, forcing a high-stakes legislative showdown by July 2026 to determine if the tariffs become permanent.

Tariff turmoil already started to hit the last batch of earnings reports. On Tuesday, Home Depot said they were still analyzing the impacts of the new Section 122 proclamation. While the home improvement retailer has high domestic sourcing for items such as lumber, CEO Ted Decker noted that the 15% global surcharge on imported hardware and tools will likely lead to "necessary price adjustments" if the tariffs remain in place for the full 150-day window allowed by the Act.³

TJX reported a strong double-beat yesterday, posting adjusted earnings of $1.43 per share on $17.7 billion in revenue, comfortably ahead of Wall Street's expectations. CEO Ernie Herrman highlighted a "strong start" to 2026, noting that the U.S. consumer remains resilient and attracted to the "treasure-hunt" value model as consolidated comparable sales rose 5%. Regarding recent trade volatility, CFO John Klinger stated that the company's full-year guidance assumes they can largely offset tariff pressures through their flexible sourcing and merchandise margins. Despite the beat, the stock experienced a slight "sell the news" reaction, trading down about 0.3% in early action as investors weighed a conservative FY2027 guidance that came in just below consensus estimates. That stock has since popped up by nearly 1.5% today.⁴

Incoming Tailwind for Retailers - A $100B Tax Windfall

Retailers are also poised to benefit from an upcoming tax refund windfall which will likely fall in the $100B - $150B range this year. Consumers typically use these lump sum refunds to pay off credit card debt from holiday spending, or make large ticket purchases such as appliances or autos.

While not referred to by companies themselves, analysts believe there will be several retail winners from these refunds. Off-price retailers such as TJX should capture the "No Tax on Overtime" demographic, workers who now have retroactive savings and are using them for wardrobe refreshes and home goods.⁵ Analysts also believe Target will be a refund winner.⁶

The IRS filing season began on January 26 and the first two weeks of data are in. So far that data shows that as of February 13, the average refund payment is up 14.2% YoY. This is a win for American households and will likely lead to a boost in spending for the first half of 2026.⁷

Blowout Beat, Tempered Reaction: The World’s Most Valuable Company Reports

Nvidia delivered another blowout performance for their fiscal Q4 2026, reporting $68.1B in revenue (up 73% YoY) and an adjusted EPS of $1.62 (up 82% YoY), comfortably beating Wall Street expectations. The surge was powered by record Data Center sales as the Blackwell chip ramped up and demand for Agentic AI infrastructure reached a fever pitch. Despite zero revenue from China due to export restrictions, the company’s guidance for next quarter came in at a massive $78B, signaling that the AI build-out is nowhere near its peak.

The market initially responded with enthusiasm, sending shares up roughly 3.5% as investors cheered the strong margins (75%) and the growth of sovereign AI revenue from national governments. Analysts have since shifted price targets higher, viewing Nvidia not just as a chipmaker, but as the essential backbone of the global AI economy. While the stock has moderated slightly after the initial jump, (down nearly 5% at the time of this publication) it continues to trade near all-time highs as supply for their next-generation architectures remains the only real bottleneck. Also, as close NVDA watchers know well, the stock often runs into the report, and slumps afterwards, despite typically beating estimates.

US CEO’s Appear Confident, For Now

The Late Earnings Report Index, our proprietary measure of CEO uncertainty, posted its lowest post-peak number ever since we began collecting this data five years ago.

The LERI tracks outlier earnings date changes among publicly traded companies with market capitalizations of $250M and higher. The LERI has a baseline reading of 100, and anything above that indicates that companies are feeling uncertain about their current and short-term prospects. A LERI reading under 100 suggests that companies feel they have a pretty good handle on the near-term.

The official post-peak season LERI reading for Q4 (data collected in Q1) stands at 51, well below the baseline reading, suggesting companies are feeling more certain about economic conditions than they were for the last three quarters. As of February 26, there were 106 late outliers and 186 early outliers.

In mid-April we will get numbers for the pre-peak LERI for the Q1 2026 reporting season, with uncertainties now swirling around everything from trade policy to AI it will be interesting to see how corporations react.

Q4 2025 Earnings Wave

In what is more-or-less the final big week of the Q4 earnings season, 1,068 companies are expected to release results (out of our universe of 11,000+ global names). Thus far, 61% of companies have reported.

The Bottom Line

As the Q4 earnings season draws to a close, the market finds itself at a crossroads of record-breaking AI growth and shifting fiscal policy. While the 15% trade surcharge introduces a fresh layer of complexity for retailers, the massive $100 billion tax windfall will likely benefit them. Investors must now weigh whether these significant consumer tailwinds can offset the "sell the news" sentiment currently hitting even the strongest performers like Nvidia. Ultimately, the transition into the Q1 2026 reporting cycle will determine if this corporate confidence can survive a high-stakes summer of legislative and trade showdowns.

¹ FactSet Earnings Insight, John Butters, February 13, 2026, https://advantage.factset.com
² “President Donald J. Trump Imposes a Temporary Import Duty to Address Fundamental International Payment Problems,” The White House, February 20, 2026, https://www.whitehouse.gov
³ The Home Depot Announces Fourth Quarter and Fiscal 2025 Results; Increases Quarterly Dividend by 1.3%;Provides Fiscal 2026 Guidance, The Home Depot, February 24, 2026, https://ir.homedepot.com
⁴ The TJX Companies, Inc. Reports Q4 and Full Year FY26 Results, February 25, 2026, https://investor.tjx.com
⁵ “Bigger Tax Refunds Are Coming. Which Retailers Gain the Most.” Barron’s, Sabrina Escobar, January 24, 2026, https://www.barrons.com
⁶ “The OBBBA 'Refund Ripple': How a Retroactive Tax Windfall is Fueling a 2026 Consumer Surge,” Market Minute, February 24, 2026, https://markets.financialcontent.com
⁷ Filing season statistics for week ending Feb. 13, 2026, IRS, https://www.irs.govistics-for-week-ending-feb-13-2026

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