Nvidia’s Big Test: Should You Buy Before Its August 27 Earnings?

A Pivotal Moment for Nvidia

As the summer earnings season winds down, Big Tech giants like Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) have delivered robust quarterly results, with most surpassing Wall Street’s expectations. 

Their aggressive investments in artificial intelligence (AI) infrastructure have fueled optimism, driving significant stock gains across the sector. Now, all eyes are on Nvidia (NASDAQ:NVDA), the AI chip leader, set to report its fiscal second quarter 2026 results on August 27. With Nvidia’s stock already up 35% year-to-date, investors are grappling with a critical question: should they buy before the earnings release or wait for the dust to settle? 

The answer hinges on Nvidia’s ability to meet lofty expectations, navigate geopolitical challenges, and capitalize on the AI spending boom. 

A High Bar and Tighter Margins

Wall Street is projecting Nvidia to report $45.9 billion in revenue for Q2, a 53% year-over-year increase, and earnings of $1.00 per share, up 47% from last year. These figures reflect Nvidia’s dominance in the AI chip market, where it holds over 92% of the graphics processing unit (GPU) market share. 

However, the company’s history of beating estimates has become less pronounced. Over the past year, Nvidia has typically exceeded revenue forecasts by an average of 5.8%, but recent quarters show a tighter beat of just 2.2%. Similarly, EPS beats, historically averaging 6.3%, have narrowed to around 3.2%. 

This trend suggests analysts are getting better at predicting Nvidia’s performance, raising the bar for a “blowout” quarter. Investors accustomed to outsized surprises may find the results less dazzling, especially compared to the strong beats from other Big Tech firms.

Geopolitical Headwinds and Market Reaction

Nvidia’s Q2 results are complicated by U.S. export restrictions on its H20 chips for China, which led to a $5.5 billion inventory charge in Q1 and an estimated $8 billion revenue loss in Q2. 

CEO Jensen Huang had called the $50 billion Chinese AI chip market “effectively closed” to U.S. firms, a significant blow given China’s prior contribution of $17.1 billion annually. While Nvidia has regained its export license during the current thaw in trade relations — albeit having to give up 15% of its revenue to the government — the outlook for the future remains hopeful for a recovery. 

With Big Tech peers posting stellar earnings, a merely in-line report from Nvidia could disappoint investors, potentially triggering a sell-off. The stock’s reaction will likely depend on forward guidance, particularly for Q3, where analysts expect $52.5 billion in revenue driven by Blackwell Ultra GPU demand. 

More conservative guidance, though, could dampen enthusiasm, while an upbeat forecast might reignite bullish sentiment.

Big Tech’s AI Spending Bonanza

Micron Technology’s (NASDAQ:MU) CEO, Sanjay Mehrotra, recently highlighted that the top five Big Tech firms — Microsoft, Meta, Amazon, Alphabet, and Apple (NASDAQ:AAPL) — are collectively planning to spend roughly $1 billion daily on AI infrastructure over the next year. 

This staggering investment underscores AI’s role as a critical growth driver, with Nvidia poised to capture a significant share. For instance, Alphabet raised its 2025 capital expenditure forecast to $85 billion, Meta to between $66 billion to $72 billion, and Amazon to over $118 billion. Nvidia’s data center revenue, which hit $39.1 billion in Q1, is expected to remain robust as hyperscalers expand AI capacity. Additionally, Nvidia’s automotive and robotics segments, up 72% to $567 million, signal diversification beyond data centers. 

This multi-faceted growth potential could bolster confidence in Nvidia’s long-term trajectory, even if near-term results face scrutiny.

Key Takeaway

Nvidia’s stock is a tough call before August 27. While its leadership in AI and Big Tech’s massive infrastructure spending make it a long-term winner, the risk of a muted market reaction looms large. 

With analysts narrowing their forecast gaps and export restrictions weighing on Q2, Nvidia may deliver solid but not spectacular results, which could underwhelm investors expecting a blockbuster. The stock’s 35% gain this year leaves it vulnerable to a pullback if guidance disappoints. 

Waiting until after the earnings report, when clarity on Blackwell ramp-up and China’s impact emerges, could offer a better entry point for risk-averse investors. However, for those with a high risk tolerance, Nvidia’s unmatched AI dominance makes it a compelling long-term hold, even at current levels.