Nvidia (NVDA) stock fell 2% in early trading Thursday after the company’s fourth quarter earnings topped Wall Street’s expectations but its outlook for first quarter gross margin came in lower than estimates.

Nvidia guided for a gross margin of roughly 71% for the first quarter, lower than its 73% gross margin in the fourth quarter.

JPMorgan analyst Harlan Sur noted that the gross margin guidance was “below consensus (72.1%) as the team continues to scale its [Blackwell] shipments higher and incurs expedite fees to get systems to customers as rapidly as possible.”

The chipmaker’s revenue of $39.3 billion and earnings per share of $0.89 topped Wall Street’s estimates, according to Bloomberg consensus data. Nvidia anticipates its total first quarter revenue will hit $43 billion, plus or minus 2%, above the $42.3 billion expected by Wall Street analysts.

Despite the earnings beat, Truist Securities analyst William Stein wrote in a note late Wednesday that “investors are yawning.”

Benchmark analyst Cody Acree told Yahoo Finance in an interview after Nvidia’s earnings release that its first quarter guidance for gross margin was slightly concerning, noting that it was indicative of pricing pressure and more competition.

“I think that’s just the future that Nvidia has to live in, but demand for their products appears to be strong, and that’s really the key for Nvidia going forward,” he said.

Nvidia’s Blackwell AI GPUs (graphics processing units) contributed $11 billion to the company’s Q4 revenue in what CFO Colette Kress said was “the fastest product ramp in our company’s history.” Nvidia had previously expected Blackwell to contribute several billion dollars in sales in its fourth quarter.