Key Takeaways:
Nvidia enters its fiscal second-quarter earnings week near $215 after five straight daily declines, with options pricing a potential $313 billion swing in market value.
"The market is so reliant on the AI trade today," Erik Kratz, a wealth adviser at Arena Private Wealth, said.
Shares closed Friday at $214.72, down 4.6% for the week and 9.2% below the 52-week high of $236.54, as the 10-year Treasury yield climbed toward 4.7%. The slide erased about $236 billion in market value. Analysts project revenue of $92.16 billion for the quarter, just 1.3% above Nvidia's $91 billion guidance midpoint, with data center sales of $85.67 billion accounting for nearly 93% of the total. Adjusted earnings are seen at $2.09 a share.
The report, due Wednesday after the close, will test whether the AI infrastructure buildout can sustain a company worth more than $5 trillion. Nvidia has beaten consensus in each of the past five quarters, yet shares fell after the last two reports by 9.34% and 10.67% within 30 days. A strong third-quarter guide tied to Vera Rubin production, which begins this quarter, would lift the ceiling.
Nvidia has also moved to deepen ties with AI search startup Perplexity, people familiar with the matter said, extending its reach beyond GPU sales into applications. Bloomberg reported that prices for systems including Vera Rubin and Grace Blackwell will rise more than 15% starting in early 2027, driven by surging memory costs.
The company's guidance again excludes data center compute revenue from China. While H-200 licenses were approved, Nvidia has generated no revenue from those shipments yet, so any change in tone on shipments landing would be an upside surprise.
Wall Street remains uniformly bullish. All 26 ratings issued in the past three months are buys, with a consensus price target of $301.82, roughly 39% above Friday's close. Benchmark's Cody Acree set a $335 target on Aug. 21, while Bank of America's Vivek Arya holds a $350 target.
The setup favors those who need every data point to be strong. If Chief Executive Jensen Huang signals demand for Vera Rubin is running ahead of supply commitments, the ceiling lifts; if guidance merely matches expectations, the reaction likely skews lower because clearing $91 billion by a couple of points is already the base case. Investors will watch the conference call Wednesday at 2 p.m. PDT for segment margins and Rubin timing.
This article is for informational purposes only and does not constitute investment advice.
