GRMN Earnings Review: Can Garmin Capture the AI-powered Wearables Buzz?

It’s shaking out to be a big year for wearables. Above all, the integration of artificial intelligence (AI) is unlocking a lot of potential.

CES 2026, held in January in Las Vegas, gave a sense of where the space is headed. 

The show featured a broad range of AI-powered wearables. Notable examples included Cored Devices’ Pebble Index O1 smart ring, which handles note-taking, calendar input and transcription, and the SwitchBot AI MindClip, a lapel device that records and summarizes conversations. Lenovo’s [LNVGY] pendant-style Qira assistant and Anker’s [300866:SZ] Soundcore Work echoed the trend toward lightweight, always-on AI companions.

Then, in mid-February, as part of its 2026 roadmap, Apple [AAPL] announced that it was focusing on AI-powered wearables, with a range of ‘Invisible Hardware’ products, all powered by the iPhone as a central hub. These range from screen-less smart glasses to AirPods with built-in, low-res cameras for environmental awareness, and wearable sensors like rings and pendants that relay health and environmental data. 

These devices are designed to feed data into Apple’s AI systems, forming a ‘BodyNet’ that enables contextual, hands-free assistance. The strategy marks a shift from the iPhone-centric ‘app era’ toward the ‘agent era’ of ambient computing, where devices see, hear and sense the user without constant input. 

Garmin: Wearables Legacy Incumbent

If there’s one stock well-positioned to leverage this growing buzz, it’s Garmin [GRMN].

Founded in 1989, Garmin began as a GPS technology pioneer for aviation and marine markets. Over time, it expanded into automotive navigation, fitness and outdoor wearables. Known for rugged, reliable devices, Garmin has grown into a global leader in connected wearables, smartwatches and GPS solutions across multiple industries.

GRMN stock spiked during the Covid-19 pandemic, but subsequently dipped back down. While it has experienced significant volatility in 2026 so far, as of February 25 it was trading at a level that surpassed even pandemic-era highs. It is up 24.22% in the year to date and up 14.93% in the past 12 months. 

The firm reported earnings on February 18. Let’s unpack why it could merit a place on tech investors’ watchlists.

Earnings Breakdown: Fitness Climbs 42%

Garmin logged Q4 pro forma earnings of $2.79 per share, a 16.6% beat over the Zacks Consensus Estimate and a 16% increase from the same quarter last year. Revenue rose to $2.12bn, surpassing expectations by 5.6% and marking a 17% year-over-year gain. 

The company’s fitness segment was the standout performer, generating $765.8m in sales, up 42% from a year earlier, powered by robust demand for wearables. Operating income in the segment reached $257m, translating to a healthy 34% margin.

In the outdoor segment, meanwhile, revenue held steady year-over-year, reflecting strong prior-year product launches. Gross and operating margins were 66% and 37%, generating $234m in operating income. Key launches included the Garmin DriveTrack 72, a multifunction GPS navigator, and the inReach Mini 3 Plus, a compact satellite communicator with voice, text, photo sharing and SOS safety features. 

Several of the company’s products earned CES Innovation Awards, including the Fenix 8 Pro-MicroLED, the Blaze Equine Wellness System and the Descent S1 Buoy.

Garmin’s aviation segment posted 16% revenue growth in Q4, driven by both OEM and aftermarket products. Gross and operating margins were 76% and 31%, respectively, producing $85m in operating income. Key launches included the D2 Air X15 and D2 Mach 2 aviator smartwatches, and the Garmin G5000H cockpit system was selected for Brazilian Air Force UH-60 helicopters. Notably, the Garmin Autoland system successfully returned an aircraft during an in-flight malfunction.

Marine revenue rose 18%, led by chartplotters, with gross and operating margins of 52% and 18%, generating $52m in operating income. New products included the GPSMAP 9000xsv chartplotter and Garmin OnBoard, a wireless man-overboard and engine cutoff system recognized with multiple safety and innovation awards.

Auto OEM revenue fell 3% due to legacy program wind-downs, with a $14m operating loss. CES unveiled the next-gen Garmin Unified Cabin domain controller and a collaboration with Meta [META], placing Garmin at the forefront of AI-enhanced, conversational vehicle experiences.

Looking ahead, Garmin projects full-year 2026 revenue of $7.9bn, indicative of continued momentum in its wearable and GPS-driven product lines. This guidance exceeds the Zacks Consensus Estimate of $7.54bn, implying year-over-year growth of roughly 13%. The company also anticipates a gross margin of 58.5%, an operating margin of 25.5% and a pro forma effective tax rate of 16%. 

These figures highlight Garmin’s strong positioning in the wearables market, particularly in the fitness and outdoor segments. The company evidently believes it is able to capitalize on rising consumer interest in connected, health-focused devices.

Big Releases Coming?

The firm did not announce any major watch releases, but there were strong suggestions of some big drops in the pipeline. 

“We do have a very active year plan for outdoor,” CEO Cliff Pemble said, adding that many launches would occur “in the back half of the year.”

Garmin is aiming to solidify its lead in the increasingly competitive rugged smartwatch market. Amazfit recently unveiled the T-Rex Ultra 2, matching many Fenix 8 features at roughly half the price. Competitors like Coros and Huawei are also targeting Garmin with adventure-focused wearables. Beyond smartwatches, Garmin’s outdoor lineup —including cycling computers and handheld GPS devices — remains due for upgrades.

At the end of February, meanwhile, Garmin launched the Catalyst 2, a motorsports device offering advanced coaching tools, and the zumo XT3, a GPS unit tailored for motorcyclists seeking performance-focused navigation. 

These products reinforce Garmin’s focus on specialized GPS hardware and enthusiast segments where reliability and feature depth matter. By catering to track drivers and riders, Garmin strengthens its brand among performance-oriented users and signals to competitors its commitment to niche markets. 

GRMN Stock: The Investment Case

On February 19, Morgan Stanley revised its rating on Garmin to ‘equal weight’ from ‘underweight’ and lifted the price target to $252 from $195. The firm noted that its earlier bearish outlook has largely run its course, pointing to Garmin’s robust 2026 revenue and margin guidance — which it considers conservative — as a key factor likely to boost investor sentiment.

Garmin is certainly well-positioned across a number of segments. Wearables and specialized GPS devices drive growth in enthusiast markets. Strong 2026 guidance, high margins, and wins in military and aviation, plus Autoland adoption and CES Innovation Awards, reinforce brand strength and tech leadership. Crucially, it is the most prominent wearables stock, and as such is well-placed to leverage growing excitement around the sector. 

However, competition in wearables is intensifying from lower-cost competitors, as well as from big beasts seeking to muscle in on the space. Elsewhere, auto OEM program wind-downs and heavy reliance on niche enthusiast segments could limit scale.