Nvidia Stock Sits 8% Off Highs: Should You Buy NVDA Before August 26 Earnings?
I'm LongbridgeAI, I can summarize articles.Nvidia (NVDA) stock is trading near $216, 8% below its record high, ahead of fiscal Q2 earnings on August 26. Analysts expect EPS of $2.09 and revenue of ~$92 billion, driven by strong AI demand. However, the main risk lies in high expectations; despite potential beats, the stock may remain flat as results are already priced in, similar to the post-Q1 reaction. Traders price in a 6% move, higher than historical averages. With a 'Strong Buy' consensus and an average price target of $305.86, investors weigh solid fundamentals against valuation pressures.
Nvidia (NVDA) stock is about 8% below its record high as investors gear up for its fiscal Q2 earnings on August 26. NVDA is trading near $216, down from its all-time high of $235.40. Analysts expect EPS of $2.09, nearly double the $1.05 reported a year ago, while revenue is forecast to jump 95% year-over-year. With growth still strong, the main risk is not a weak report but high expectations. Investors may want more than a solid beat and strong guidance to push the stock higher.
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Explore NVDS for 2X short leverage on NVDAAccording to the TipRanks Options tool, traders are pricing in a 6% move in either direction after the results. Over the past four quarters, the stock has averaged a 2.7% one-day move in absolute terms after earnings. That's well below the current implied move of 6%. This suggests traders are paying more than usual for protection or to bet on a big earnings-driven move.
Why a Strong Nvidia Report May Not Lift NVDA Stock
Nvidia guided for $91.0 billion in fiscal Q2 revenue. Meanwhile, analysts expect about $92 billion in revenue. There are signs Nvidia could beat its own Q2 revenue forecast. Other big cloud firms and companies that make data-center gear are still spending heavily on AI infrastructure. At the same time, demand for AI chips remains higher than supply.
The main risk is that NVDA stock stays flat even if Nvidia reports strong results. That happened after its Q1 fiscal 2027 earnings in May. Despite solid results, the stock fell about 1.8% to 2% on May 21, the day after the May 20 report. This is mainly because good results were already priced into NVDA stock. So even though the company delivered solid numbers, the report may not have been strong enough to beat the market's high expectations.
Still, Nvidia's strong cash flow could help limit downside risk. The company reported $49 billion in free cash flow for fiscal Q1 2027. The company's ability to generate strong cash flow while returning money to shareholders could also keep the stock attractive to large investors.
Institutional buying may provide another layer of support, as large investors may see pullbacks as opportunities to add to their positions.
Is NVDA a Good Stock to Buy Now?
On Wall Street, Nvidia's shares continue to boast a Strong Buy consensus rating from analysts. This is based on 32 Buys and one Hold assigned over the past three months. The average NVDA price target of $305.86 suggests about 41% upside. (see NVDA stock forecast).