Nvidia earnings will test the resurgent AI trade again
Nvidia earnings are due Wednesday, August 26, and they are the next major test of the resurgent AI trade. Wall Street expects adjusted EPS of $2.09 on $92 billion in revenue, a 96% year-over-year jump. Chip stocks have struggled to hold July's rebound as investors question returns on huge AI spending. That print will show whether demand is still accelerating after Big Tech's results landed nearly a month ago, according to Yahoo Finance.
Shares closed at $214.72 on August 21, down 0.98%.
Key Takeaways
- Bloomberg consensus looks for $2.09 in adjusted EPS and $92 billion in revenue, up 96% year over year.
- Data center sales are expected to top $85.4 billion, with hyperscalers at $43.5 billion and ACIE at $41.7 billion.
- Microsoft, Amazon, and Google's cloud numbers eased some ROI fears, but extra spending from Google and Meta still rattled investors.
- Seeking Alpha warns Nvidia stock could drop even on a beat, with support near $190 if $210 breaks.
When do Nvidia earnings land, and what is Wall Street expecting?
Nvidia is set to report second-quarter results on Wednesday, August 26, Seeking Alpha said. Yahoo Finance noted that Big Tech peers already reported nearly a month earlier, leaving this as the quarter's marquee chip readout.
Bloomberg's analyst consensus, cited by Yahoo Finance, calls for adjusted earnings per share of $2.09 on revenue of $92 billion. That would be a 96% year-over-year jump in overall revenue and a continued quarter-over-quarter acceleration.
Nvidia changed its reporting last quarter. Data Center sales are now split between hyperscalers and a bucket labeled AI Clouds, Industrial, and Enterprise, or ACIE. PC, game console, workstation, robotics, and automotive revenue now sit in Edge Computing.
Data Center revenue is anticipated to top $85.4 billion, up 107%. Hyperscaler revenue is expected to reach $43.5 billion, while ACIE sales are projected at $41.7 billion.
Why do Nvidia earnings matter so much for the AI trade?
MarketWatch calls Nvidia the beating heart of the AI boom and the stock market, setting up a big test. Yahoo Finance said chip stocks have struggled to hold last month's gains after July's steep drop, as investors asked whether vast AI outlays will pay off.
Microsoft, Amazon, and Google helped allay at least some of those fears with strong growth in their cloud businesses. Google, along with Meta, still spooked investors on increased spending.
Nvidia still gets most of its revenue from hyperscalers such as Amazon, Google, and Microsoft. Each of those firms either builds its own chips to cut dependence on Nvidia or sells chips to third parties, creating a potential future headwind.
Earlier this month Nvidia said it is working with BlackRock, Blackstone, KKR, Apollo, Brookfield, and Goldman Sachs on a $500 billion pool of capital that would securitize Nvidia GPUs. It also said it is backing SB Energy and OpenAI's plan for an 8-gigawatt data center in Ohio with up to $150 billion.
That mix of demand, funding, and customer concentration is why net worth and wealth investors treat this print as a market-wide event.
Could Nvidia stock plunge even if Nvidia earnings beat?
Yes, that is the risk Seeking Alpha highlighted. The market is pricing in strong growth and setting a high bar for outperformance, the analysis said. Options and technical work pointed to asymmetric post-earnings risk: limited upside, and a possible sharp decline toward $190 support.
Positive gamma positioning may cap the stock's upside while slowing initial declines. A break below $210 could accelerate downside volatility. Even with a long run of beating estimates, Nvidia's post-earnings moves often stay inside options-implied ranges, which can limit outsized gains.
That setup is why a clean beat may not be enough. Investors will watch the hyperscaler versus ACIE mix and whether sequential growth is still accelerating.