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Nvidia (NVDA) just reported another record quarter, but the markets did not react favorably, with NVDA stock falling roughly 5.5% after reporting earnings on Thursday, Feb. 26, the worst one-day drop since April 2025, even after another earnings beat and favorable guidance.However, Dan Ives from Wedbush Securities laid out an aggressive pathway for Nvidia moving forward, believing there is more upside for the stock and that Nvidia did exceedingly well in the quarter, per Bloomberg.Then why the disconnect between Nvidia’s fundamentals and the market reaction? Nvidia’s fundamentals are bulletproof, but you need to see NVDA as more of a proxy now. When people talk about Nvidia, they are referring to the broader, hyped-up AI environment, rather than just another tech stock.Is Big Tech’s spending on AI infrastructure still in its “anything it takes” phase, or is it approaching the point where investors demand a clearer payback? That is the question heading into each earnings season for Nvidia.

Nvidia delivers a monster quarter; Wall Street throws a tantrum anyway.Cheng/AFP via Getty Images

Dan Ives and the “Michael Jordan-like numbers”Wedbush’s Dan Ives is framing Nvidia in sports terms, calling the statistics “Michael Jordan-like numbers” and arguing that the usual “law of large numbers” critique still doesn’t apply.What counts for investors attempting to assess if the sell-off is a warning or an opportunity is his broader argument.Nvidia’s next step isn’t just “more AI.” There are more verticals for AI (business, physical AI, robots, and autonomous systems), which will help sustain demand.The industry will eventually have five, seven, or even 10 important chipmakers, but Ives thinks Nvidia will still be the best choice for the next 18 to 36 months.He also said that software is the “most disconnected” trade right now and identified Microsoft (MSFT) as his top buy pick. This suggests that the AI winners list may include more than just semis.That framing helps make sense of why the stock reaction can seem crazy. Nvidia’s quarter is all about Nvidia. The stock is about the broader AI industry.Nvidia fundamentals: the raw numbersNvidia’s fundamentals didn’t suddenly crack. It reported record revenue of $68.1 billion in revenue, up 73% year over year, and data-center revenue, its bread and butter, jumped 75% year over year to $62.3 billion.Investors keyed on a few more scoreboard hits.GAAP gross margin:75.0%Diluted EPS (GAAP):$1.76Full-year revenue:$215.9 billion, up 65%Key asterisk: Nvidia said it is not assuming any data center compute revenue from China in its outlook. And Nvidia also returned $41.1 billion to stockholders in fiscal 2026 (through buybacks and dividends).Yet despite all of this, the stock did an about-face. What gives?Why NVDA’s earnings failed to satiate Wall StreetNvidia is suffering from an expectations problem, not a “numbers problem,” because when the goalposts change so quickly, there is little that Nvidia can do from a fundamentals perspective.As I said earlier, do not think of Nvidia as just another tech stock. Think of it as the benchmark for the AI business.Related: Samsung Galaxy owners stunned by what appeared after a Google updateIt’s not about whether Nvidia beat or met expectations; now investors want to know whether the AI buildout, which is the process of creating and implementing AI technologies, is coming close to the point when consumers start to optimize, pause, or ask harder questions about ROI.And that concern is now powerful enough to make Nvidia’s stellar quarter not matter much.The Wedbush veteran basically advised, “Don’t overthink it,” and “the law of large numbers, it doesn’t apply with Nvidia.”But there are three reasons why the stock reacted the way it did after the earnings report.People are getting more worried about a “capex peak.” Investors are getting tired of wondering if hyperscalers can keep spending at full speed and what would happen to Nvidia if spending ever “digests” for even a short time.Nvidia is trading like the heart of the AI tape. Nvidia doesn’t simply fall when the news is bad; it can also fall when the news is favorable but not good enough.The model still includes geopolitics. The “no China data center compute revenue assumed” line is a warning that Nvidia’s forward curve may still change because of policy.Nvidia’s next story test is Rubin and inference economicsWall Street wants “payback,” but Nvidia is throwing them a curveball. What does it mean? Make AI cheaper and easier to use on a large scale, especially for inference, which is when models really run in production.Nvidia noted in its findings statement that the Rubin platform is supposed to make inference tokens up to 10 times cheaper than Blackwell. It also noted that big cloud providers, including AWS, Google Cloud, Microsoft Azure, and Oracle Cloud Infrastructure, are some of the first to employ Rubin-based instances.Nvidia also claimed it secured a non-exclusive licensing deal with Groq to make AI inference better around the world. This is another indicator that inference is becoming a more crowded and strategically vital battleground.NDA investors: what to see nextThree things are more important than the earnings beat if you’re trading NVDA from here.Hyperscaler tone: Any talk of “optimizing” AI infrastructure investmentRubin’s comments about timing and supply: How quickly the next platform goes upInference roadmap clarity: How Nvidia keeps its share when other options become availableIn the end, Nvidia did everything right. But now the market doesn’t simply reward “great.”In addition, it wants assurance that the entire AI ecosystem is progressing well. Nvidia is now another name for the AI industry, and that’s why the pressure is high. Related: Samsung shocks Apple in smartphone war

Valued at a market cap of $443 billion, Costco is among the largest retailers in the world. The blue-chip stock has returned close to 600% to shareholders over the past decade, comfortably beating the broader markets. While Costco (COST) generates a significant portion of sales from product sales, its net income is largely tied to membership fees. In fact, the membership fee is also the engine that quietly powers the company’s dividend growth. Costco’s multi-billion-dollar businessCostco generated $5.3 billion in membership fees last fiscal year (ended in August), according to data from Fiscal.ai.That sounds modest compared to $275 billion in total sales. But net income, what the company actually kept after all its costs, was $8.3 billion.Do the math. Membership fees accounted for roughly 64% of Costco’s profits.That’s a remarkable stat. Costco runs its retail business on razor-thin margins by design. The goal is to pass savings along to members. The membership fee is where the real money is made.And members keep coming back. In Q1 fiscal 2026, covering the 12 weeks ended Nov. 23, membership fee incomeclimbed to $1.329 billion, up 14% from the same period a year ago. Costco CFO Gary Millerchip said last September’s fee increase in the U.S. and Canada accounted for just under half of that growth. The rest came from a bigger member base and more people upgrading to Executive Membership.Does it feel unfair to pay money for permission to shop at a store? Costco members don’t think so. They tend to be extremely loyal and keep coming back.

Costco’s member numbers were up last year.Shutterstock

Costco’s membership growth continues to accelerate Costco ended Q1 fiscal 2026 with 81.4 million total paid members, a 5.2% increase year over year, according to Zacks Equity Research.Executive Memberships, which cost more but offer 2% cash back on most purchases, grew even faster, at 9.1%, reaching 39.7 million members.More Executive Members means more fee income per household. It’s a simple but powerful dynamic.One thing Millerchip flagged on the Q1 earnings call: Renewal rates dipped slightly. The U.S. and Canada renewal rate came in at 92.2%, down 0.1% from the prior quarter. Worldwide, it stood at 89.7%.More members are signing up digitally, and that group, typically younger shoppers, renews at a slightly lower rate than those who sign up in-store. Costco is working to close that gap with targeted outreach to members approaching renewal. Early results have been encouraging, with the decline coming in smaller than expected.How membership income connects to Costco dividendsCostco has paid a regular quarterly dividend for years, and the company has a history of issuing special dividends when cash builds up. That consistency is built on the predictability of membership income.Unlike retail sales, which swing with consumer spending, tariffs, or supply chain disruptions, membership fees are collected upfront and renewed annually. More Dividend Stocks:The Dow’s best dividend stocks: A shortlist for income investorsSteve Cohen’s Point72 scoops up $336M in blue-chip dividend stock134-year-old beverage giant hikes dividend again in 2026That makes them one of the most reliable revenue streams in all of retail.Wall Street projects Costco to expand its free cash flow from $7.8 billion in 2025 to $12.25 billion in 2030. Given an annual dividend expense of $2.2 billion, Costco’s payout ratio is well covered at 28%. Analysts also forecast Costco’s annual dividend to increase from $4.92 per share in fiscal 2025 to $7.88 per share in fiscal 2030. Key dividend metrics for Costco stock:Annual dividend: $5.20 per share (regular quarterly dividend)Dividend yield: Approximately 0.5%, based on recent share price10-year dividend growth rate: Approximately 12% annuallyPayout ratio: Approximately 28% of FCF (leaving significant room for growth)The low payout ratio is the key detail for dividend investors. Costco keeps plenty of earnings in reserve, which gives it the flexibility to raise the regular dividend, issue special dividends, or fund warehouse expansion, all at the same time.Is Costco a top dividend stock to own?Costco ended Q1 with 921 warehouses worldwide and plans to open 28 net new locations in fiscal 2026. The big-box retailer also disclosed that fiscal 2025 warehouse openings are now generating an annualized $192 million in sales per location in their opening year, up from $150 million just two years ago.More warehouses mean more members. More members mean more fee income. More fee income means a stronger foundation for the dividend.It’s a flywheel that has worked for decades. And as Costco pushes deeper into digital, AI-powered inventory management, and personalization tools, the model looks only to get more efficient.For dividend investors, the story here is straightforward. Costco isn’t just a retailer. It’s a membership business that also sells a lot of chicken, tires, and gold jewelry on the side.Related: How Costco keeps prices so low for members

TheStreet aims to feature only the best products and services. If you buy something via one of our links, we may earn a commission.Why we love this dealNothing is meant to last forever and your bedding is no exception. It should be replaced at least every few years to ensure it remains comfortable and supportive to help you get a good night’s sleep consistently. If you’re in the market for new pillows specifically, you’re in luck because Amazon marked down its no. 1 bestseller for a limited time. The Beckham Hotel Collection Queen Standard Bed Pillows are on sale for only $42 (or just $21 apiece), but not for long. These are known for selling out quickly while on sale, so we suggest making your purchase before it’s too late. All you need is a Prime membership, or you can sign up for a free trial to take advantage of the exclusive deal.  Beckham Hotel Collection Queen Standard Bed Pillows, $42 (was $80) at Amazon

Courtesy of Amazon

Why do shoppers love it?These fluffy pillows are made with a 250-thread-count cotton cover stuffed with 100% polyester fill that mimics the feeling of luxury down. Not only are these pillows cheaper than those made with real goose feathers, but they provide the same comfort without negative effects. You can have a supportive, cushioned pillow without being poked in the face by feathers or waking up to a giant mess. At such a low price just in time for spring cleaning, you might consider stocking up while you can. Treat yourself to a new set of soft pillows and toss a couple more onto your guest beds so your loved ones can rest easy every time they stay over. After all, you can purchase two sets at $42 each, and it’ll be almost the same price as if you bought one set at its normal price.The two-pack is backed by more than 170,000 people who have given it five stars and over 50,000 sets have sold in the past 30 days. Tons of shoppers refer to them as the “best pillows ever,” and others say they’re like “sleeping on a cloud.”Related: Amazon is selling a 7-piece down alternative comforter set that’s available in 28 colors for $36″If you experience headaches or neck pain from sleeping on too flat of a pillow, this will save you,” one reviewer wrote. “I don’t wake up during the night with neck pain, and for that I am elated.”Don’t miss your chance to score the Beckham Hotel Collection Bed Pillows on sale for only $21 apiece because there’s no telling how long the sale price will last, considering how popular they are.