It’s rare that artificial intelligence (AI) stocks and value are linked, but with the stock 17.54% below its 52-week, Nvidia (NVDA) is gaining some acclaim as a value play.
That could be to the benefit of traders considering the Direxion Daily NVDA Bull 2X Shares (NVDU), which seeks to deliver 200% of the daily performance of the semiconductor stock. Admittedly, value is a long-term investing style and NVDU is certainly not a long-term instrument, but the geared ETF could benefit if the value crowd beckons for once high-flying Nvidia.
Perhaps adding to the allure of NVDU as an occasional way of playing Nvidia from a value perspective is that the AI stock isn’t a value name in the strictest sense of the word. Rather, it’s more of a growth at a reasonable price (GARP) idea. That indicates that it’s retaining growth prospects that could support the case for sporadic use of NVDU.
“Our $280 fair value estimate implies price/adjusted earnings multiples of 30 times for fiscal 2027 and 20 times for fiscal 2028,” noted Morningstar’s Brian Colello. “Given the acceleration in AI capital spending we expect for the industry in calendar 2026, we model 80% total revenue growth for Nvidia in fiscal 2027.”
That $280 fair value estimate is well above Nvidia’s July 30 closing price of $195.04.
AI Infrastructure Spending Tells the Story Potentially adding to the case for value in Nvidia and consideration of NVDU by short-term traders is the point that hyperscalers remain undaunted in their AI spending plans. By some estimates, hyperscalers could spend as much as $700 billion this year, with global AI infrastructure spending exceeding that figure in the coming years.
“Nvidia foresees $3 trillion-$4 trillion of annual AI infrastructure spending by 2030,” added Colello. “Nvidia is expanding nicely in AI. It’s supplying industry-leading GPUs but also moving into networking, software, and services to tie these GPUs into even more powerful clusters.”
AI spending trends will likely prove durable, and that durability is building at a time when Nvidia is unusually attractive from a valuation perspective. Assuming the company can mitigate margin erosion, the stock offers credible rebound potential and that would likely benefit the geared NVDU.
“We expect Nvidia to achieve mid-70s gross margins in fiscal 2027. We anticipate modest gross margin deterioration to the high 60s a decade from now. We think GAAP operating margins will hover in the high 50s to the mid-60s in each year of our 10-year forecast, depending on the pace of research and development spending,” observed Colello.
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The Nvidia logo is displayed on a building at Nvidia headquarters on August 27, 2025 in Santa Clara, California. (Justin Sullivan/Getty Images)
Nvidia was gaining early on Tuesday as the chip maker rode renewed optimism about artificial-intelligence. Now the question is whether it can close its discount to rivals.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) just quietly reset how investors should think about its next decade. The chip story is well told. The software story now has a number.
The Number Three. That is how many open-source Omniverse libraries NVIDIA is releasing on GitHub as part of its Agent Toolkit expansion tied to SIGGRAPH 2026: ovrtx, ovphysx and CAD-to-SimReady. Three libraries sound modest. What they actually do is embed NVIDIA’s simulation stack directly inside the 3D and CAD tools engineers already use, letting AI agents handle sensor simulation, physics, and asset validation without leaving Houdini, Onshape, or Blender. That is the anchor: three open-source libraries designed to make NVIDIA the default runtime for physical AI development.
What It Means NVIDIA’s physical AI thesis has always needed a software layer to match the hardware. This is that layer. NVIDIA is meeting developers inside the tools they already run. SideFX is integrating the libraries into Houdini. PTC (NASDAQ:PTC) is integrating them into Onshape. Four Inception startups (ForgeCAD, Lightwheel, Moonlake AI, and Palatial) are building agent-driven workflows on top. Every one of those integrations is a lock-in point.
The financial scale behind this software push is already visible in the reported numbers. Q1 FY27 Data Center revenue reached $75.25 billion, up 92% year over year, with Data Center Networking revenue of $14.8 billion, up 199% year over year. Total revenue landed at $81.61 billion, up 85.2%, with non-GAAP EPS of $1.87 versus a $1.7738 estimate. The company is guiding Q2 FY27 revenue to $91.0 billion plus or minus 2% at a 75% non-GAAP gross margin. Those margins are the tell. Hardware alone rarely runs at that level for long. Software attach does.
Market Reaction The stock has cooled since the Q1 FY27 filing. Shares traded around $206.86 on Aug. 3, down nearly 12% from their year-to-date high. But over the past month, NVIDIA is up 5.78% with a one-year gain of nearly 15%. Longer horizons still tell the compounding story: 916% over five years. Market cap sits near $5.01 trillion against a P/E of 31 and a forward P/E of 23. NVIDIA reports Q2 FY27 financials on Aug. 26, and shares could rally into the company’s earnings call, especially with a renewed focus on the three-library release.
The Bull Case The three-library release matters because it converts NVIDIA’s hardware lead into a developer standard. Jensen Huang framed it directly: “The physical AI era will be built in simulation first.” If that is correct, the company that owns the simulation runtime owns the training ground for every robot, autonomous vehicle, and industrial system that follows.
Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.
The rest of the R&D disclosure reads like an argument for the same thesis. NVIDIA announced NemoClaw for the OpenClaw agent platform, OpenShell with privacy and security controls, and an Agent Toolkit for building autonomous enterprise AI agents. It rolled out Alpamayo 1.5 and Omniverse NuRec for autonomous driving, new Cosmos and Isaac GR00T N models, and the Halos OS unified safety architecture. It expanded partnerships for autonomous driving with Hyundai, Kia, Uber, BYD, Geely, Isuzu, and Nissan. On the compute side, the Vera Rubin platform and BlueField-4 STX anchor the next generation, and NVIDIA Dynamo 1.0 boosts generative and agentic inference on Blackwell GPUs by up to 7x.
Huang’s own framing from the call: “Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries. NVIDIA is uniquely positioned at the center of this transformation as the only platform that runs in every cloud, powers every frontier and open source model, and scales everywhere AI is produced, from hyperscale data centers to the edge.”
Capital return backs the operating story. The board approved an additional $80 billion share repurchase authorization, raised the quarterly dividend from $0.01 to $0.25 per share, and returned approximately $20.0 billion to shareholders in Q1. Analyst positioning is lopsidedly constructive, with 48 Buy ratings, 10 Strong Buy ratings, two Hold ratings and one Sell ratings, and an analyst target price of $302.31.
Bottom Line Three libraries do not sound like a moat until you notice where they land: inside Houdini, inside Onshape, inside the tools engineers already trust. That is how software ecosystems compound. Long-term holders should track two catalysts from the input data. First, the RTX Spark systems arriving in fall 2026 from ASUS, Dell, HP, Lenovo, Microsoft Surface and MSI, which put local physical AI compute in developer hands. Second, the Q2 FY27 guidance of $91 billion plus or minus 2%, which is the next reported test of whether agentic and physical AI demand keeps compounding. Three libraries. One thesis. A company that keeps making its ecosystem harder to leave.
Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.
The artificial intelligence (AI) revolution has so far defied the bears' prophecies of doom, and there are reasons to believe it will continue to do so. We may be entering the age of AI agents, or self-directed systems that can autonomously execute tasks, work toward goals, and help corporations achieve significant productivity gains. The agentic AI boom could catapult the semiconductor industry to new heights. Nvidia's (NVDA +2.93%) CEO, Jensen Huang, has a lot to say on the topic. After predicting in a recent Bloomberg interview that we will eventually have billions of AI agents, here's what he said about how big the industry needs to be to support that agentic AI explosion:
My guess is the semiconductor industry will probably have to be 10 times larger than it is today over the next decade or so.
The industry was valued at roughly $791.7 billion last year, according to some estimates, so that means Huang believes it could be worth $7.9 trillion in a decade. As he said, that's a mere guess, but the general sentiment is that the industry will need to expand rapidly over the next 10 years as agentic AI takes over. Several companies could capitalize on this and deliver strong returns. Here are two stocks to consider to avoid getting left behind: Nvidia itself and Micron Technology (MU +0.79%).
Image source: Nvidia Corporation.
Nvidia remains the undisputed leader in the GPU (Graphics Processing Unit) market, and the company's financial results and guidance suggest sustained demand for its products. In the first quarter of its fiscal year 2027, ended April 26, Nvidia's revenue jumped by 85% year over year to $81.6 billion. Gross margins increased to 74.9%, up from 60.5% in the comparable period of the previous fiscal year. Nvidia's adjusted earnings per share (EPS) were $1.87, up 140% year over year.
The company famously projected $1 trillion in purchase orders for its Blackwell and Vera Rubin (which was released this year) through 2027. Nvidia's new Vera Rubin architecture is particularly important, since it includes the stand-alone Vera CPU (Central Processing Unit).
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Agentic AI systems run on CPUs, so there should be sustained demand in that corner of the industry as AI agents become increasingly popular. Nvidia projected $20 billion in stand-alone CPU revenue through the end of 2026, and sees a $200 billion addressable market in that niche alone. That highlights the fact that Nvidia is no longer just a GPU company. The semiconductor specialist builds not just the chips, but also the systems, software, and networking that power AI.
That grants Nvidia strong prospects as the industry marches forward, and the company doesn't seem too expensive at current levels. Nvidia is trading at 22.9x forward earnings, versus an average of 20x for information technology stocks. That valuation is fair, considering Nvidia's position in the industry.
2. Micron Technology Micron makes memory and storage chips used in everything from smartphones to data centers. The company's data center business has been its biggest growth driver in recent quarters, as the memory chip shortage has supported sustained demand for its hardware and given it significant pricing power. Micron's financial results have exploded as a result.
In the third quarter of its fiscal year 2026, ended on May 28, Micron's revenue was $41.46 billion, growing by almost 346% year over year. The company's margins improved significantly, as did the bottom line. Micron's adjusted EPS of $25.11 was about 1215% higher than the year-ago period.
Meanwhile, one of the company's biggest competitors, Samsung Electronics, expects the memory chip shortage to last at least until 2028. And beyond that, if Huang's predictions about the semiconductor industry's direction over the next decade are even remotely correct, demand for Micron's products should remain healthy over this period. The market isn't convinced, though.
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The stock is experiencing a pullback, with shares down 15% over the past month as many investors take some profits, fearing its amazing run won't last much longer. But as a counterpoint, Micron is trading at just 5.3x forward earnings, which seems like a bargain given how quickly revenue and earnings are growing. Further, the company has signed several long-term supply agreements that somewhat protect it against a sharp decline in revenue and earnings if demand for its products slows.
What does all this mean for investors? The tech stock could deliver outstanding returns over the long run if the AI industry maintains its momentum or the memory chip shortage persists. Investors who believe either outcome is likely should consider buying Micron's shares on the dip.
Nvidia (NVDA - Free Report) ended the recent trading session at $206.64, demonstrating a +2.93% change from the preceding day's closing price. The stock outpaced the S&P 500's daily gain of 1.48%. Elsewhere, the Dow gained 1.32%, while the tech-heavy Nasdaq added 2.13%.
Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 3.04% in the past month. In that same time, the Computer and Technology sector lost 5.75%, while the S&P 500 gained 0.19%.
Analysts and investors alike will be keeping a close eye on the performance of Nvidia in its upcoming earnings disclosure. The company's earnings report is set to go public on August 26, 2026. The company's earnings per share (EPS) are projected to be $2.09, reflecting a 99.05% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $91.71 billion, up 96.2% from the prior-year quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $9.09 per share and revenue of $387.19 billion, indicating changes of +90.57% and +79.3%, respectively, compared to the previous year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Nvidia. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.52% increase. Right now, Nvidia possesses a Zacks Rank of #1 (Strong Buy).
With respect to valuation, Nvidia is currently being traded at a Forward P/E ratio of 22.09. This denotes a discount relative to the industry average Forward P/E of 40.3.
One should further note that NVDA currently holds a PEG ratio of 0.38. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Semiconductor - General industry currently had an average PEG ratio of 0.74 as of yesterday's close.
The Semiconductor - General industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 9, finds itself in the top 4% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Nvidia (NVDA +2.93%) is the most important company in artificial intelligence (AI) today, the near-monopoly supplier of the chips that train the world's AI models. But five years from now, I suspect it will look like a very different business. The forces reshaping it are already visible if you look closely.
Right now, the overwhelming majority of Nvidia's revenue comes from selling powerful GPUs to a handful of giant cloud companies building AI. Over the next five years, that mix should broaden in important ways.
The market for running AI models, known as inference, is likely to dwarf the market for training them, and it favors a wider range of customers. Nvidia is also quietly building a software business on top of its hardware, from its CUDA platform to enterprise AI tools, and recurring software revenue tends to be stickier and higher margin than one-time chip sales. A company that leans more on software and inference is a steadier one.
Image source: Getty Images.
New frontiers beyond the data center The bigger transformation may come from entirely new markets. Nvidia's leadership talks constantly about "physical AI," meaning robots, factories, and self-driving cars that need its chips to see and think. Add sovereign AI, where entire countries build their own computing infrastructure, and you can see Nvidia's growth spreading well beyond the cloud giants that dominate its sales today. If those bets pay off, Nvidia will become less dependent on any single customer group, which lowers its risk.
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The competitive and cyclical reality Now the sober side. The same customers buying Nvidia's chips are designing their own to reduce their reliance on it, and rivals are pushing hard to take share. The extraordinary profit margins Nvidia enjoys today will likely come down as competition intensifies. And the AI spending boom cannot climb straight up forever, since chips are a cyclical business. In five years, Nvidia may well be much larger yet growing more slowly, with more competitors nibbling at the edges of its empire.
Put it together, and Nvidia five years out probably looks like a bigger, more diversified compute platform spanning inference, software, robotics, and global infrastructure, rather than the training-chip juggernaut it is now. That could make it more durable but also slower-growing and less dominant.
The real question for investors is whether Nvidia can broaden its moat faster than rivals erode it. I am optimistic because its ecosystem is deeply entrenched, but I would own it knowing the company and the stock will not be the same as they are today.
Amazon (AMZN +4.58%) reported its second-quarter results on July 30. The company's update impressed investors. Amazon's net sales grew 20% year over year to $200.6 billion, and the company's earnings per share were $5.75, significantly higher than the $1.68 reported in the year-ago period (although in fairness, Amazon benefited from the positive impact of equity investments).
The tech leader's shares jumped following its quarterly update. But behind the major headlines, several developments should have investors excited about Amazon's future. Let's focus on one thing the company's CEO, Andy Jassy, said and what it means for shareholders.
Image source: The Motley Fool.
A new growth driver in the works Earlier this year, reports surfaced suggesting that Amazon was in talks to sell its Trainium line of artificial intelligence (AI) chips to other companies. This probably wasn't a surprise to investors who had been paying attention. Andy Jassy had already mentioned several times that its Trainium franchise was in high demand among Amazon Web Services (AWS) customers. And it turns out, this demand isn't slowing down.
In the press release announcing Amazon's second quarter results, Andy Jassy said that the company's AI chip business now boasts a more than $25 billion annual run rate, growing at triple-digit percentages year over year. As of the first quarter, Amazon's AI chip business had a run rate of about $20 billion, so the $25 billion in Q2 represents a 25% quarter-over-quarter increase. There is a large opportunity here for Amazon. Custom AI chips, such as its Trainium franchise, are in increasingly high demand for several reasons.
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While Nvidia's (NVDA +2.93%) GPUs (Graphics Processing Units) have them beat in peak performance and breadth of capabilities, custom AI Chips can be more competitive on another metric: Price-performance, or how much performance companies get for every dollar they spend. As Amazon has argued, Trainium offers significantly better price-performance than comparable GPUs and can, therefore, help companies reduce expenses and lower their dependence on Nvidia's hardware.
Amazon expects that doubling down on Trainium will lead to meaningful operating margin gains within its cloud computing business versus the alternative of purchasing AI chips from other companies. Some might point out that a $25 billion run rate isn't that impressive for a company that generates over $700 billion in annual revenue. But at the rate it is growing, Amazon's AI chip business could become a meaningful growth driver within a few years if the company decides to sell its chips.
That would be yet another important growth driver. Meanwhile, Amazon's robust financial results, accelerating cloud sales growth, and multiple opportunities ahead across e-commerce and other industries already make the stock attractive. The company's AI chip business is practically a bonus, although a very nice one.
DeepSeek has intensified the global artificial-intelligence price war after independent testing found its new V4-Flash model costs more than 100 times less to o
Nvidia NVDA shares rose 3% on Monday as investors remained optimistic about the chipmaker's position at the center of the artificial intelligence infrastructure buildout, with expanding data center investments and favorable analyst views supporting sentiment ahead of its upcoming earnings report.
Recent industry reports suggest that large cloud service providers are accelerating spending on AI infrastructure, particularly on Nvidia's latest generation of liquid-cooled Blackwell systems.
The trend reflects continued demand for high-performance computing as enterprise generative AI applications move beyond pilot projects and into large-scale deployment.
Investors also assessed reports of manufacturing yield improvements that could help Nvidia ease previous supply constraints and deliver more products during the current fiscal period.
AI infrastructure spending remains the key growth driverNvidia continues to benefit from its dominant position in the AI accelerator market, with analysts pointing to sustained demand from hyperscale cloud providers and emerging enterprise workloads.
The company has also been supported by a broader improvement in the macroeconomic backdrop.
Cooling inflation data and expectations that the Federal Reserve could stabilize or eventually ease monetary policy have improved sentiment toward high-growth technology companies by making future earnings more valuable under lower discount rates.
Beyond traditional cloud customers, research firms have also highlighted growing opportunities from sovereign AI initiatives across Europe and Asia, with governments investing in domestic AI infrastructure that could expand demand for advanced computing hardware.
Despite geopolitical trade uncertainties affecting parts of the semiconductor industry, Nvidia's diversified supply chain and software ecosystem have helped insulate the company from some of the broader sector pressures.
While enthusiasm around AI spending remains strong, some market observers have cautioned that the industry's rapid infrastructure expansion is increasing financing requirements.
“Companies that were once huge cash generators are now spending so much on AI infrastructure that they have become large borrowers,” wrote Stephen Coltman, head of macro at 21shares, in a research note. “Even Nvidia, the mega cap with the largest profit margins, is seeing its credit spread widen as it is reported to be offering vendor financing and credit guarantees worth hundreds of billions to its customers.”
The comments underscore investor attention on how technology companies are funding the massive capital expenditures required to support AI infrastructure, even as demand for advanced chips remains robust.
Analysts remain bullish ahead of earningsInvestors are also looking ahead to Nvidia's earnings report scheduled for Aug. 26, which could provide another catalyst for the stock if results reinforce confidence in the company's AI-driven growth outlook.
According to FactSet, Wall Street's average price target for Nvidia stands at $314.29.
Bernstein reiterated its Buy rating on the stock with a price target of $315. Nvidia shares closed at $200.75 last Friday, implying a 56% upside from that level.
With AI infrastructure spending continuing to expand and new sources of demand emerging, investors remain focused on whether Nvidia can sustain its growth trajectory when it reports quarterly results later this month.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NVDA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Just a few years ago, Nvidia's (NVDA +3.58%) largest revenue source was gaming. The AI build-out changed that, as data centers have made up an increasingly larger share of its sales. In its fiscal first quarter of 2027, which ended April 26, 2026, it reported total revenue of $81.6 billion, with data center sales accounting for 92% ($75.2 billion) of that.
While Nvidia and other chipmakers reached new highs earlier this year, investors have grown concerned about a potential slowdown in AI infrastructure spending. Here's why Nvidia CEO Jensen Huang argues that there's still plenty of money to be made -- and answers whether the company's reliance on AI spending is an issue.
Image source: Nvidia Corporation.
Jensen Huang believes this is just the beginning Semiconductor stocks have been through multiple drawdowns in recent months. In early June, AI stocks and chipmakers lost a combined $1.3 trillion in market value. Huang was in Seoul on June 8, and he framed the downturn as an opportunity to buy at a discount. He also said that we're still at the beginning of the AI build-out.
More recently, Huang spoke with Axios co-founder Mike Allen in late July, when he said that he didn't believe the semiconductor industry was due for a bust. Although the business has historically been cyclical, Huang said this time is different because the demand is infrastructure-driven rather than consumer-driven. The Nvidia CEO also believes the semiconductor industry needs to be somewhere between "five to 10 times larger than it is." Then, in a Bloomberg interview, he tightened his prediction to the high end of that range.
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It makes sense for the CEO of the largest chipmaker to be bullish on chips, but this is still a very lofty forecast. The semiconductor market is projected to reach $1.51 trillion in 2026, according to the World Semiconductor Trade Statistics organization. A 10x increase would mean a value of $15.1 trillion, and achieving that in 10 years would require a compound annual growth rate (CAGR) of 26%. That kind of growth is possible for one year, or even a few years, but sustaining it for a decade would be quite the feat.
Revenue concentration is a risk factor for Nvidia Huang has been right so far about AI spending. Nvidia's revenue is consistently growing and was up 85% year over year in its fiscal Q1 2027. Hyperscalers continue to maintain or raise their capex guidance. In a recent example, Amazon raised its full-year guidance from $200 billion to $220 billion in late July.
However, this level of spending may not last, especially if it doesn't translate into meaningful profits for AI companies. If any hyperscalers pull back, it could hit Nvidia's earnings hard, as the chipmaker's revenue is concentrated not just in data centers but in a few customers. In a recent filing, it revealed that three direct customers account for 54% of its revenue.
Nvidia still looks like one of the stronger AI investments, given its role as the leading GPU company. But its customer concentration and reliance on data center spending are risks worth keeping an eye on for investors.
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These 7 Stocks Are Analyst Favorites For Magnificent Earnings Growth; Google Rebounds After Sell-Off Chip stocks were a mixed bag on Monday as the Philadelphia semiconductor index, known as SOX, struggled to hold gains. However, Nvidia (NVDA) stock retook a key support level. In afternoon trades on the stock market today, the SOX rose a fraction. The SOX includes the 30 largest chip stocks traded in the U.S. Nvidia stock was among the biggest…
Alphabet (NASDAQ: GOOGL | GOOGL Price Prediction) and Amazon (NASDAQ: AMZN) both reported Q2 FY2026 results shaped by the same force: the enormous check every hyperscaler now writes to NVIDIA (NASDAQ: NVDA).
Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Nvidia (NVDA - Free Report) , which belongs to the Zacks Semiconductor - General industry.
When looking at the last two reports, this maker of graphics chips for gaming and artificial intelligence has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 6.11%, on average, in the last two quarters.
For the most recent quarter, Nvidia was expected to post earnings of $1.77 per share, but it reported $1.87 per share instead, representing a surprise of 5.65%. For the previous quarter, the consensus estimate was $1.52 per share, while it actually produced $1.62 per share, a surprise of 6.58%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Nvidia lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Nvidia has an Earnings ESP of +0.52% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #1 (Strong Buy), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on August 26, 2026.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Danica Pension Livsforsikringsaktieselskab reduced its stake in shares of NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 11.5% in the 1st quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The institutional investor owned 2,483,189 shares of the computer hardware maker’s stock after selling 322,538 shares during the period. NVIDIA comprises approximately 8.3% of Danica Pension Livsforsikringsaktieselskab’s holdings, making the stock its biggest position. Danica Pension Livsforsikringsaktieselskab’s holdings in NVIDIA were worth $433,068,000 as of its most recent filing with the Securities and Exchange Commission (SEC).
Several other hedge funds and other institutional investors also recently modified their holdings of the stock. ABN Amro Investment Solutions lifted its stake in NVIDIA by 25.9% during the first quarter. ABN Amro Investment Solutions now owns 2,784,088 shares of the computer hardware maker’s stock worth $485,545,000 after purchasing an additional 573,343 shares during the last quarter. Pacific Sun Financial Corp boosted its holdings in NVIDIA by 5.2% in the first quarter. Pacific Sun Financial Corp now owns 12,982 shares of the computer hardware maker’s stock worth $2,264,000 after purchasing an additional 637 shares during the period. PNC Financial Services Group Inc. increased its stake in NVIDIA by 3.4% during the first quarter. PNC Financial Services Group Inc. now owns 11,057,975 shares of the computer hardware maker’s stock valued at $1,928,511,000 after purchasing an additional 364,427 shares during the last quarter. Oslo Pensjonsforsikring AS bought a new stake in NVIDIA during the first quarter valued at $13,502,000. Finally, HORAN Wealth LLC raised its holdings in shares of NVIDIA by 3.4% during the first quarter. HORAN Wealth LLC now owns 54,359 shares of the computer hardware maker’s stock worth $9,814,000 after purchasing an additional 1,762 shares during the period. Institutional investors own 65.27% of the company’s stock.
Insider Activity In related news, Director Stephen C. Neal sold 15,500 shares of the firm’s stock in a transaction that occurred on Wednesday, June 3rd. The stock was sold at an average price of $215.73, for a total value of $3,343,815.00. Following the sale, the director directly owned 116,135 shares in the company, valued at $25,053,803.55. This trade represents a 11.77% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director John Dabiri sold 625 shares of NVIDIA stock in a transaction on Wednesday, May 27th. The shares were sold at an average price of $214.00, for a total value of $133,750.00. Following the sale, the director directly owned 14,163 shares in the company, valued at $3,030,882. The trade was a 4.23% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 1,901,125 shares of company stock valued at $410,583,015. Insiders own 3.94% of the company’s stock.
NVIDIA News Summary Here are the key news stories impacting NVIDIA this week:
Positive Sentiment: Amazon supports demand outlook: Amazon raised its capital-expenditure forecast and downplayed competition between its custom AI chips and NVIDIA’s processors. The update reassured investors that hyperscaler spending remains a significant growth driver for NVIDIA. Nvidia Stock Rises. Thank Amazon. Positive Sentiment: Additional large-scale chip demand: Chinese AI company Moonshot reportedly has an Alibaba computing agreement involving approximately 20,000 NVIDIA chips. Although the arrangement is indirect, it highlights continued demand for NVIDIA’s accelerators across AI platforms. Moonshot has Nvidia chip cluster from Alibaba computing deal Positive Sentiment: Sector-wide investor support: Semiconductor ETFs attracted substantial new money as chip stocks rallied following strong technology earnings, providing a favorable backdrop for NVIDIA. Analysts also remain broadly bullish, with reported median price targets well above the current trading level and positive earnings-estimate revisions. Semiconductor ETFs Draw Cash This Week as Chip Stocks Rally Neutral Sentiment: Upcoming earnings catalyst: NVIDIA will report fiscal second-quarter 2027 results on August 26. Investors will focus on revenue growth, forward guidance and whether hyperscaler AI spending is translating into sustained orders. The company’s latest reported quarter showed $81.6 billion in revenue, up 85% year over year, and earnings above consensus. Negative Sentiment: Financing concerns remain: Investors continue to debate whether AI infrastructure expansion relies too heavily on leveraged or “circular” financing arrangements. Credit-market hedging activity and discussion of a potential financing backstop tied to an OpenAI data-center project could limit valuation expansion. NVIDIA Stock Is Still Up, But $250 Billion AI Risk Has Spooked The Debt Market Negative Sentiment: Bearish positioning and selling: Investor Michael Burry reportedly expanded bearish bets against NVIDIA, while recent insider and institutional selling adds a secondary source of caution. These transactions do not necessarily indicate deteriorating fundamentals but may contribute to volatility. NVIDIA Price Performance NVDA stock opened at $200.75 on Monday. The company has a quick ratio of 2.85, a current ratio of 3.44 and a debt-to-equity ratio of 0.04. NVIDIA Corporation has a fifty-two week low of $164.07 and a fifty-two week high of $236.54. The firm’s 50-day simple moving average is $205.41 and its 200 day simple moving average is $196.20. The stock has a market cap of $4.86 trillion, a PE ratio of 30.74, a price-to-earnings-growth ratio of 0.39 and a beta of 2.23.
NVIDIA (NASDAQ:NVDA – Get Free Report) last issued its quarterly earnings data on Wednesday, May 20th. The computer hardware maker reported $1.87 earnings per share for the quarter, beating the consensus estimate of $1.76 by $0.11. The firm had revenue of $81.61 billion for the quarter, compared to the consensus estimate of $78.42 billion. NVIDIA had a net margin of 62.97% and a return on equity of 96.94%. NVIDIA’s quarterly revenue was up 85.2% compared to the same quarter last year. During the same period last year, the firm posted $0.81 EPS. As a group, sell-side analysts predict that NVIDIA Corporation will post 8.79 EPS for the current year.
NVIDIA declared that its Board of Directors has approved a share repurchase plan on Wednesday, May 20th that allows the company to buyback $80.00 billion in outstanding shares. This buyback authorization allows the computer hardware maker to purchase up to 1.5% of its shares through open market purchases. Shares buyback plans are usually a sign that the company’s board believes its shares are undervalued.
NVIDIA Increases Dividend The firm also recently declared a quarterly dividend, which was paid on Friday, June 26th. Stockholders of record on Thursday, June 4th were issued a dividend of $0.25 per share. This represents a $1.00 dividend on an annualized basis and a dividend yield of 0.5%. This is a boost from NVIDIA’s previous quarterly dividend of $0.01. The ex-dividend date of this dividend was Thursday, June 4th. NVIDIA’s dividend payout ratio is presently 15.31%.
Analysts Set New Price Targets A number of research firms have recently issued reports on NVDA. JPMorgan Chase & Co. raised their price target on shares of NVIDIA from $265.00 to $280.00 and gave the stock an “overweight” rating in a research report on Thursday, May 21st. DA Davidson reaffirmed a “buy” rating and set a $300.00 price objective on shares of NVIDIA in a research report on Monday, June 1st. Raymond James Financial reiterated a “strong-buy” rating and set a $330.00 price objective on shares of NVIDIA in a research note on Thursday, May 21st. BTIG Research began coverage on shares of NVIDIA in a report on Wednesday, April 15th. They issued a “buy” rating on the stock. Finally, William Blair restated an “outperform” rating on shares of NVIDIA in a research note on Tuesday, June 2nd. Three investment analysts have rated the stock with a Strong Buy rating, forty-eight have issued a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat, the stock has a consensus rating of “Buy” and an average price target of $304.26.
Read Our Latest Analysis on NVDA
NVIDIA Company Profile (Free Report)
NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.
The company’s product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.
Further Reading Five stocks we like better than NVIDIA 3 Fixed-Income ETFs Show Why Yield Is Only Part of the Income Story AbbVie Quietly Solved Its Biggest Problem—Now What? Rio Tinto’s Results Make the Case for Looking Beyond Tech in the AI Trade Strategy’s Structural Strength: Hidden in a $8 Billion Illusion
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SummaryNVIDIA remains dominant in AI infrastructure, with Q1 FY2027 data center revenue reaching $75 billion, up 92% year over year. Investor focus has shifted from AI spending growth toward monetization, infrastructure returns, and sustainability of elevated expectations. Leopold Aschenbrenner’s positioning highlights AI bottlenecks like power, memory, and infrastructure as potential higher-return opportunities. NVDA's valuation remains supported by growth and margins, but earnings execution, Blackwell and Rubin ramps must remain exceptional. your_photo/iStock via Getty Images
It is safe to say that Nvidia (NVDA) continues dominating in the construction of AI infrastructure, yet there has been a shift in perception of this trend from investors' side. Indeed, Nvidia still delivers
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Nvidia (NVDA +2.83%) is starting to get lost in the crowd. The artificial intelligence (AI) bellwether remains on top of the market cap list, but its performance lately has been underwhelming.
Nvidia ended July essentially where it started. The stock's 8% year-to-date gain and 13% increase over the past year trail the market on both counts. August offers the promise of something new: volatility. With a critical financial update now just three weeks away and a compelling valuation, Nvidia is ready to stand out from the crowd again.
Image source: Getty Images.
1. Earnings season is finally here Nvidia stock will be on the move after the market closes on Aug. 26. It isn't likely to march in place until then, as it did last month, but it will definitely move sharply higher or lower over the final few days of August.
Expectations are high. Analysts see revenue shooting 96% higher to $91.85 billion for the fiscal second quarter that ended last week. They see the bottom line following suit, with earnings per share nearly doubling to $2.08 after ringing up a profit of $1.05 per share a year earlier.
Recent history suggests that Nvidia will do slightly better than expected. It has landed 3% to 6% higher than Wall Street's profit target in each of the four previous quarterly updates. That might seem comforting at first glance, but recent history rears its ugly head again:
The four purple circles represent when Nvidia announced its quarterly results over the past year. In all four cases, the shares moved markedly lower in the aftermath. Stellar top-line growth and modest earnings beats weren't enough to impress the market. Nvidia will need more in its tank this time, and thankfully, it could make a difference that the stock conserved its energy this summer.
Take one final look at that chart. Have you noticed how each subsequent earnings report came with the stock at a higher price point than the previous update? The initial reaction was to sell, but a rally eventually bore fruit, weeks later, if not a month or two later. Things are different this time, with Nvidia trading substantially lower. A break from the pattern could be just the ticket for the stock to finally move higher -- for the first time in more than a year -- after an Nvidia earnings report.
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2. Stock chart aside, momentum is building Short-term price action can be cruel sometimes. If Nvidia comes even reasonably close to the 96% year-over-year revenue jump the market is expecting, it will be the fourth consecutive quarter of accelerating top-line growth.
Revenue has gone from a 56% step-up in last year's fiscal second quarter to increases of 63%, 73%, and 85% in its latest financial report. The cherry on top of this sundae of disconnected fundamentals is that Nvidia is doing this while it's not close to full strength. Trade restrictions remain in China, the world's second largest economy. Supply-chain constraints are keeping AI chip producers in the equivalent of an elementary school speed zone. Nvidia's competitors are bumping up against the same headwinds, but they're also gaining ground here.
Nvidia looks better than its stock chart. It's more than the sum of the earnings season slides, which it was able to claw its way out of to a higher level until this summer's sector rotation. Nvidia will be fine, and that's even more true if you have the luxury of patience to see this through.
3. Nvidia was cheap before, and it's even cheaper now Investors haven't lost money in Nvidia during the lull. There are fates worse than merely treating July like a staring contest and losing to the market over the past year despite posting double-digit returns.
The stock went on a round trip to nowhere last month, but the analysts continued to nudge their profit targets higher. Analysts now see Nvidia earning $9 a share in the current fiscal year and $12.89 a share in fiscal 2028, which starts in less than six months.
Those consensus estimates were lower a month ago and even lower the month before. Time-travel to three months ago, and Wall Street was modeling a consensus profit per share of $8.34 for fiscal 2027 and $11.23 for next year. Nvidia enters August trading at a reasonable 22 times this fiscal year's earnings and less than 16 times next year's target.
It's a good time to be a market contrarian when it comes to Nvidia. Now let's see what August has to say about things.
Barometer Capital Management Inc. grew its position in NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 35.5% during the 1st quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The institutional investor owned 35,500 shares of the computer hardware maker’s stock after acquiring an additional 9,300 shares during the period. NVIDIA comprises 2.5% of Barometer Capital Management Inc.’s portfolio, making the stock its 13th largest holding. Barometer Capital Management Inc.’s holdings in NVIDIA were worth $6,191,000 at the end of the most recent quarter.
Other institutional investors and hedge funds have also made changes to their positions in the company. Lifetime Wealth Management P.C. purchased a new position in shares of NVIDIA during the 4th quarter worth approximately $26,000. Longview Financial Advisors Inc. acquired a new stake in shares of NVIDIA in the 1st quarter valued at approximately $27,000. Longfellow Investment Management Co. LLC boosted its stake in shares of NVIDIA by 47.9% in the second quarter. Longfellow Investment Management Co. LLC now owns 207 shares of the computer hardware maker’s stock valued at $33,000 after buying an additional 67 shares in the last quarter. Spurstone Advisory Services LLC purchased a new stake in shares of NVIDIA in the second quarter valued at approximately $40,000. Finally, Inspire Investing LLC acquired a new position in NVIDIA during the fourth quarter worth $44,000. 65.27% of the stock is currently owned by institutional investors and hedge funds.
Analyst Ratings Changes Several research analysts have issued reports on the company. Citigroup initiated coverage on NVIDIA in a research report on Wednesday, April 15th. They issued a “buy” rating for the company. Citic Securities boosted their target price on shares of NVIDIA from $242.00 to $315.00 and gave the stock a “buy” rating in a research report on Friday, May 22nd. Wells Fargo & Company reaffirmed an “overweight” rating and set a $315.00 price target (up from $265.00) on shares of NVIDIA in a research note on Tuesday, May 12th. Wolfe Research restated an “outperform” rating and set a $275.00 target price on shares of NVIDIA in a research report on Thursday, May 21st. Finally, Susquehanna reaffirmed a “positive” rating and issued a $275.00 target price (up from $250.00) on shares of NVIDIA in a report on Tuesday, May 12th. Three research analysts have rated the stock with a Strong Buy rating, forty-eight have given a Buy rating and two have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Buy” and a consensus price target of $304.26.
Check Out Our Latest Stock Analysis on NVIDIA
NVIDIA Stock Performance NASDAQ:NVDA opened at $200.75 on Monday. The company has a current ratio of 3.44, a quick ratio of 2.85 and a debt-to-equity ratio of 0.04. The company has a market capitalization of $4.86 trillion, a P/E ratio of 30.74, a price-to-earnings-growth ratio of 0.39 and a beta of 2.23. The firm has a 50-day moving average price of $205.41 and a two-hundred day moving average price of $196.20. NVIDIA Corporation has a twelve month low of $164.07 and a twelve month high of $236.54.
NVIDIA (NASDAQ:NVDA – Get Free Report) last announced its quarterly earnings results on Wednesday, May 20th. The computer hardware maker reported $1.87 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.76 by $0.11. The company had revenue of $81.61 billion for the quarter, compared to the consensus estimate of $78.42 billion. NVIDIA had a net margin of 62.97% and a return on equity of 96.94%. The company’s revenue for the quarter was up 85.2% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.81 earnings per share. As a group, research analysts expect that NVIDIA Corporation will post 8.79 earnings per share for the current fiscal year.
NVIDIA Increases Dividend The business also recently disclosed a quarterly dividend, which was paid on Friday, June 26th. Investors of record on Thursday, June 4th were given a dividend of $0.25 per share. The ex-dividend date was Thursday, June 4th. This represents a $1.00 annualized dividend and a dividend yield of 0.5%. This is an increase from NVIDIA’s previous quarterly dividend of $0.01. NVIDIA’s payout ratio is presently 15.31%.
NVIDIA declared that its Board of Directors has authorized a stock repurchase plan on Wednesday, May 20th that permits the company to repurchase $80.00 billion in shares. This repurchase authorization permits the computer hardware maker to buy up to 1.5% of its shares through open market purchases. Shares repurchase plans are often a sign that the company’s management believes its stock is undervalued.
Key Stories Impacting NVIDIA Here are the key news stories impacting NVIDIA this week:
Positive Sentiment: Amazon supports demand outlook: Amazon raised its capital-expenditure forecast and downplayed competition between its custom AI chips and NVIDIA’s processors. The update reassured investors that hyperscaler spending remains a significant growth driver for NVIDIA. Nvidia Stock Rises. Thank Amazon. Positive Sentiment: Additional large-scale chip demand: Chinese AI company Moonshot reportedly has an Alibaba computing agreement involving approximately 20,000 NVIDIA chips. Although the arrangement is indirect, it highlights continued demand for NVIDIA’s accelerators across AI platforms. Moonshot has Nvidia chip cluster from Alibaba computing deal Positive Sentiment: Sector-wide investor support: Semiconductor ETFs attracted substantial new money as chip stocks rallied following strong technology earnings, providing a favorable backdrop for NVIDIA. Analysts also remain broadly bullish, with reported median price targets well above the current trading level and positive earnings-estimate revisions. Semiconductor ETFs Draw Cash This Week as Chip Stocks Rally Neutral Sentiment: Upcoming earnings catalyst: NVIDIA will report fiscal second-quarter 2027 results on August 26. Investors will focus on revenue growth, forward guidance and whether hyperscaler AI spending is translating into sustained orders. The company’s latest reported quarter showed $81.6 billion in revenue, up 85% year over year, and earnings above consensus. Negative Sentiment: Financing concerns remain: Investors continue to debate whether AI infrastructure expansion relies too heavily on leveraged or “circular” financing arrangements. Credit-market hedging activity and discussion of a potential financing backstop tied to an OpenAI data-center project could limit valuation expansion. NVIDIA Stock Is Still Up, But $250 Billion AI Risk Has Spooked The Debt Market Negative Sentiment: Bearish positioning and selling: Investor Michael Burry reportedly expanded bearish bets against NVIDIA, while recent insider and institutional selling adds a secondary source of caution. These transactions do not necessarily indicate deteriorating fundamentals but may contribute to volatility. Insider Activity at NVIDIA In other NVIDIA news, Director Mark A. Stevens sold 885,000 shares of the stock in a transaction on Thursday, June 18th. The stock was sold at an average price of $210.17, for a total transaction of $186,000,450.00. Following the sale, the director owned 5,207,271 shares in the company, valued at approximately $1,094,412,146.07. This represents a 14.53% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Stephen C. Neal sold 15,500 shares of the firm’s stock in a transaction on Wednesday, June 3rd. The stock was sold at an average price of $215.73, for a total value of $3,343,815.00. Following the transaction, the director directly owned 116,135 shares of the company’s stock, valued at $25,053,803.55. The trade was a 11.77% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 1,901,125 shares of company stock valued at $410,583,015. 3.94% of the stock is owned by corporate insiders.
About NVIDIA (Free Report)
NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.
The company’s product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.
Recommended Stories Five stocks we like better than NVIDIA 3 Fixed-Income ETFs Show Why Yield Is Only Part of the Income Story AbbVie Quietly Solved Its Biggest Problem—Now What? Rio Tinto’s Results Make the Case for Looking Beyond Tech in the AI Trade Strategy’s Structural Strength: Hidden in a $8 Billion Illusion Want to see what other hedge funds are holding NVDA? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for NVIDIA Corporation (NASDAQ:NVDA – Free Report).
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Bellwether Advisors LLC lowered its stake in shares of NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 52.7% during the 1st quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 18,019 shares of the computer hardware maker’s stock after selling 20,057 shares during the period. Bellwether Advisors LLC’s holdings in NVIDIA were worth $3,143,000 as of its most recent filing with the Securities and Exchange Commission (SEC).
Other hedge funds have also recently modified their holdings of the company. Lifetime Wealth Management P.C. bought a new stake in NVIDIA in the 4th quarter worth approximately $26,000. Longview Financial Advisors Inc. purchased a new position in shares of NVIDIA in the first quarter valued at $27,000. Longfellow Investment Management Co. LLC grew its holdings in shares of NVIDIA by 47.9% in the second quarter. Longfellow Investment Management Co. LLC now owns 207 shares of the computer hardware maker’s stock valued at $33,000 after purchasing an additional 67 shares in the last quarter. Spurstone Advisory Services LLC bought a new stake in NVIDIA in the second quarter worth $40,000. Finally, Inspire Investing LLC purchased a new stake in NVIDIA during the fourth quarter valued at $44,000. Hedge funds and other institutional investors own 65.27% of the company’s stock.
Analyst Upgrades and Downgrades A number of equities analysts have commented on the stock. JPMorgan Chase & Co. lifted their price objective on shares of NVIDIA from $265.00 to $280.00 and gave the stock an “overweight” rating in a research note on Thursday, May 21st. Raymond James Financial restated a “strong-buy” rating and set a $330.00 target price on shares of NVIDIA in a research report on Thursday, May 21st. BNP Paribas Exane increased their price target on shares of NVIDIA from $270.00 to $285.00 and gave the company an “outperform” rating in a report on Thursday, May 21st. Daiwa Securities Group boosted their price objective on NVIDIA from $215.00 to $255.00 and gave the stock an “outperform” rating in a research note on Friday, May 22nd. Finally, Seaport Research Partners upped their price objective on NVIDIA from $140.00 to $180.00 and gave the company a “sell” rating in a research report on Thursday, May 21st. Three investment analysts have rated the stock with a Strong Buy rating, forty-eight have given a Buy rating and two have issued a Hold rating to the company. Based on data from MarketBeat.com, NVIDIA has a consensus rating of “Buy” and an average target price of $304.26.
View Our Latest Research Report on NVDA
NVIDIA Stock Performance Shares of NASDAQ NVDA opened at $200.75 on Monday. NVIDIA Corporation has a fifty-two week low of $164.07 and a fifty-two week high of $236.54. The company has a debt-to-equity ratio of 0.04, a quick ratio of 2.85 and a current ratio of 3.44. The company has a market cap of $4.86 trillion, a price-to-earnings ratio of 30.74, a PEG ratio of 0.39 and a beta of 2.23. The business’s 50 day moving average price is $205.41 and its 200-day moving average price is $196.20.
NVIDIA (NASDAQ:NVDA – Get Free Report) last announced its quarterly earnings data on Wednesday, May 20th. The computer hardware maker reported $1.87 EPS for the quarter, beating the consensus estimate of $1.76 by $0.11. NVIDIA had a return on equity of 96.94% and a net margin of 62.97%.The company had revenue of $81.61 billion for the quarter, compared to the consensus estimate of $78.42 billion. During the same quarter in the prior year, the company posted $0.81 EPS. NVIDIA’s quarterly revenue was up 85.2% on a year-over-year basis. On average, sell-side analysts expect that NVIDIA Corporation will post 8.79 earnings per share for the current year.
NVIDIA Increases Dividend The business also recently declared a quarterly dividend, which was paid on Friday, June 26th. Investors of record on Thursday, June 4th were paid a $0.25 dividend. The ex-dividend date of this dividend was Thursday, June 4th. This represents a $1.00 annualized dividend and a yield of 0.5%. This is a boost from NVIDIA’s previous quarterly dividend of $0.01. NVIDIA’s payout ratio is 15.31%.
NVIDIA declared that its board has initiated a share repurchase program on Wednesday, May 20th that permits the company to buyback $80.00 billion in outstanding shares. This buyback authorization permits the computer hardware maker to reacquire up to 1.5% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s management believes its shares are undervalued.
Insider Buying and Selling In other news, Director John Dabiri sold 625 shares of the firm’s stock in a transaction that occurred on Wednesday, May 27th. The shares were sold at an average price of $214.00, for a total transaction of $133,750.00. Following the transaction, the director directly owned 14,163 shares of the company’s stock, valued at approximately $3,030,882. This trade represents a 4.23% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark A. Stevens sold 885,000 shares of the business’s stock in a transaction that occurred on Thursday, June 18th. The shares were sold at an average price of $210.17, for a total value of $186,000,450.00. Following the completion of the sale, the director owned 5,207,271 shares of the company’s stock, valued at $1,094,412,146.07. The trade was a 14.53% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 1,901,125 shares of company stock valued at $410,583,015 in the last 90 days. Company insiders own 3.94% of the company’s stock.
More NVIDIA News Here are the key news stories impacting NVIDIA this week:
Positive Sentiment: Amazon supports demand outlook: Amazon raised its capital-expenditure forecast and downplayed competition between its custom AI chips and NVIDIA’s processors. The update reassured investors that hyperscaler spending remains a significant growth driver for NVIDIA. Nvidia Stock Rises. Thank Amazon. Positive Sentiment: Additional large-scale chip demand: Chinese AI company Moonshot reportedly has an Alibaba computing agreement involving approximately 20,000 NVIDIA chips. Although the arrangement is indirect, it highlights continued demand for NVIDIA’s accelerators across AI platforms. Moonshot has Nvidia chip cluster from Alibaba computing deal Positive Sentiment: Sector-wide investor support: Semiconductor ETFs attracted substantial new money as chip stocks rallied following strong technology earnings, providing a favorable backdrop for NVIDIA. Analysts also remain broadly bullish, with reported median price targets well above the current trading level and positive earnings-estimate revisions. Semiconductor ETFs Draw Cash This Week as Chip Stocks Rally Neutral Sentiment: Upcoming earnings catalyst: NVIDIA will report fiscal second-quarter 2027 results on August 26. Investors will focus on revenue growth, forward guidance and whether hyperscaler AI spending is translating into sustained orders. The company’s latest reported quarter showed $81.6 billion in revenue, up 85% year over year, and earnings above consensus. Negative Sentiment: Financing concerns remain: Investors continue to debate whether AI infrastructure expansion relies too heavily on leveraged or “circular” financing arrangements. Credit-market hedging activity and discussion of a potential financing backstop tied to an OpenAI data-center project could limit valuation expansion. NVIDIA Stock Is Still Up, But $250 Billion AI Risk Has Spooked The Debt Market Negative Sentiment: Bearish positioning and selling: Investor Michael Burry reportedly expanded bearish bets against NVIDIA, while recent insider and institutional selling adds a secondary source of caution. These transactions do not necessarily indicate deteriorating fundamentals but may contribute to volatility. About NVIDIA (Free Report)
NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.
The company’s product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.
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CacheTech Inc. boosted its holdings in shares of NVIDIA Corporation (NASDAQ:NVDA – Free Report) by 10.7% during the 1st quarter, according to its most recent filing with the Securities and Exchange Commission. The firm owned 51,649 shares of the computer hardware maker’s stock after purchasing an additional 5,009 shares during the quarter. NVIDIA comprises 1.7% of CacheTech Inc.’s portfolio, making the stock its 14th biggest holding. CacheTech Inc.’s holdings in NVIDIA were worth $9,008,000 as of its most recent SEC filing.
Other large investors also recently added to or reduced their stakes in the company. Lifetime Wealth Management P.C. bought a new position in shares of NVIDIA during the 4th quarter valued at about $26,000. Longview Financial Advisors Inc. purchased a new position in shares of NVIDIA during the first quarter valued at about $27,000. Longfellow Investment Management Co. LLC increased its holdings in shares of NVIDIA by 47.9% in the second quarter. Longfellow Investment Management Co. LLC now owns 207 shares of the computer hardware maker’s stock worth $33,000 after purchasing an additional 67 shares during the last quarter. Spurstone Advisory Services LLC purchased a new stake in shares of NVIDIA in the second quarter worth about $40,000. Finally, Inspire Investing LLC purchased a new stake in shares of NVIDIA in the fourth quarter worth about $44,000. 65.27% of the stock is owned by hedge funds and other institutional investors.
Wall Street Analyst Weigh In Several equities analysts have weighed in on NVDA shares. New Street Research cut their price target on NVIDIA from $343.00 to $340.00 in a report on Thursday, May 21st. Wells Fargo & Company reiterated an “overweight” rating and set a $315.00 target price (up from $265.00) on shares of NVIDIA in a research report on Tuesday, May 12th. Jefferies Financial Group reissued a “buy” rating and issued a $300.00 target price (up from $275.00) on shares of NVIDIA in a report on Thursday, May 21st. China Renaissance began coverage on shares of NVIDIA in a research report on Friday, June 5th. They issued a “buy” rating and a $319.00 price target on the stock. Finally, Rothschild & Co Redburn upped their price target on shares of NVIDIA from $280.00 to $300.00 and gave the company a “buy” rating in a research note on Tuesday, May 26th. Three analysts have rated the stock with a Strong Buy rating, forty-eight have given a Buy rating and two have issued a Hold rating to the company. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Buy” and a consensus target price of $304.26.
View Our Latest Stock Report on NVDA
NVIDIA Price Performance NVIDIA stock opened at $200.75 on Monday. NVIDIA Corporation has a 12-month low of $164.07 and a 12-month high of $236.54. The company has a current ratio of 3.44, a quick ratio of 2.85 and a debt-to-equity ratio of 0.04. The firm has a 50-day moving average price of $205.41 and a 200-day moving average price of $196.20. The firm has a market capitalization of $4.86 trillion, a PE ratio of 30.74, a price-to-earnings-growth ratio of 0.39 and a beta of 2.23.
NVIDIA (NASDAQ:NVDA – Get Free Report) last issued its quarterly earnings results on Wednesday, May 20th. The computer hardware maker reported $1.87 EPS for the quarter, beating the consensus estimate of $1.76 by $0.11. The company had revenue of $81.61 billion for the quarter, compared to the consensus estimate of $78.42 billion. NVIDIA had a net margin of 62.97% and a return on equity of 96.94%. The firm’s revenue was up 85.2% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.81 EPS. As a group, equities research analysts forecast that NVIDIA Corporation will post 8.79 EPS for the current year.
NVIDIA Increases Dividend The firm also recently declared a quarterly dividend, which was paid on Friday, June 26th. Stockholders of record on Thursday, June 4th were issued a $0.25 dividend. The ex-dividend date was Thursday, June 4th. This is a positive change from NVIDIA’s previous quarterly dividend of $0.01. This represents a $1.00 annualized dividend and a dividend yield of 0.5%. NVIDIA’s dividend payout ratio (DPR) is currently 15.31%.
NVIDIA announced that its board has initiated a stock repurchase plan on Wednesday, May 20th that authorizes the company to repurchase $80.00 billion in shares. This repurchase authorization authorizes the computer hardware maker to repurchase up to 1.5% of its shares through open market purchases. Shares repurchase plans are often an indication that the company’s board of directors believes its shares are undervalued.
Insider Transactions at NVIDIA In other NVIDIA news, Director John Dabiri sold 625 shares of the stock in a transaction on Wednesday, May 27th. The stock was sold at an average price of $214.00, for a total value of $133,750.00. Following the sale, the director owned 14,163 shares in the company, valued at $3,030,882. This trade represents a 4.23% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Stephen C. Neal sold 15,500 shares of NVIDIA stock in a transaction on Wednesday, June 3rd. The stock was sold at an average price of $215.73, for a total value of $3,343,815.00. Following the sale, the director owned 116,135 shares of the company’s stock, valued at approximately $25,053,803.55. This trade represents a 11.77% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 1,901,125 shares of company stock worth $410,583,015. 3.94% of the stock is currently owned by company insiders.
Key NVIDIA News Here are the key news stories impacting NVIDIA this week:
Positive Sentiment: Amazon supports demand outlook: Amazon raised its capital-expenditure forecast and downplayed competition between its custom AI chips and NVIDIA’s processors. The update reassured investors that hyperscaler spending remains a significant growth driver for NVIDIA. Nvidia Stock Rises. Thank Amazon. Positive Sentiment: Additional large-scale chip demand: Chinese AI company Moonshot reportedly has an Alibaba computing agreement involving approximately 20,000 NVIDIA chips. Although the arrangement is indirect, it highlights continued demand for NVIDIA’s accelerators across AI platforms. Moonshot has Nvidia chip cluster from Alibaba computing deal Positive Sentiment: Sector-wide investor support: Semiconductor ETFs attracted substantial new money as chip stocks rallied following strong technology earnings, providing a favorable backdrop for NVIDIA. Analysts also remain broadly bullish, with reported median price targets well above the current trading level and positive earnings-estimate revisions. Semiconductor ETFs Draw Cash This Week as Chip Stocks Rally Neutral Sentiment: Upcoming earnings catalyst: NVIDIA will report fiscal second-quarter 2027 results on August 26. Investors will focus on revenue growth, forward guidance and whether hyperscaler AI spending is translating into sustained orders. The company’s latest reported quarter showed $81.6 billion in revenue, up 85% year over year, and earnings above consensus. Negative Sentiment: Financing concerns remain: Investors continue to debate whether AI infrastructure expansion relies too heavily on leveraged or “circular” financing arrangements. Credit-market hedging activity and discussion of a potential financing backstop tied to an OpenAI data-center project could limit valuation expansion. NVIDIA Stock Is Still Up, But $250 Billion AI Risk Has Spooked The Debt Market Negative Sentiment: Bearish positioning and selling: Investor Michael Burry reportedly expanded bearish bets against NVIDIA, while recent insider and institutional selling adds a secondary source of caution. These transactions do not necessarily indicate deteriorating fundamentals but may contribute to volatility. About NVIDIA (Free Report)
NVIDIA Corporation, founded in 1993 and headquartered in Santa Clara, California, is a global technology company that designs and develops graphics processing units (GPUs) and system-on-chip (SoC) technologies. Co-founded by Jensen Huang, who serves as president and chief executive officer, along with Chris Malachowsky and Curtis Priem, NVIDIA has grown from a graphics-focused chipmaker into a broad provider of accelerated computing hardware and software for multiple industries.
The company’s product portfolio spans discrete GPUs for gaming and professional visualization (marketed under the GeForce and NVIDIA RTX lines), high-performance data center accelerators used for AI training and inference (including widely adopted platforms such as the A100 and H100 series), and Tegra SoCs for automotive and edge applications.
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Nvidia founder and CEO Jensen Huang. Bloomberg/Getty Images Nvidia's biggest competitive advantage is no longer as untouchable as it once seemed.
For two decades, Nvidia's crown jewel wasn't just chips; it was the software that turned them into the building blocks of AI, known as CUDA.
Short for Compute Unified Device Architecture, CUDA is the brainchild of longtime Nvidia executive Ian Buck, who heads high-performance computing. It took years to build, with ready-made code for common AI tasks, tools to find bugs, and software that lets thousands of chips work together to train models.
Now, some believe AI could eventually automate one of the industry's hardest jobs: building the software that powers AI itself.
The industry is at an important threshold, says Jeremy Nixon, a former Google Brain researcher and the founder of AI software startup Infinity. He told Business Insider his startup used AI coding agents to recreate CUDA-like software for the chip startup D-Matrix in 10 hours — evidence, he said, that one of Nvidia's biggest moats is being crossed.
Infinity founder and CEO Jeremy Nixon. Infinity.inc The pressure doesn't only come from startups. Cloud giants like Google, Amazon, and Microsoft have spent years building software around their own AI chips, while OpenAI and Anthropic have recently demonstrated AI models capable of generating system software.
DeepSeek founder Liang Wenfeng recently said that coding agents, along with his startup's own programming language TileLang, have made AI software substantially easier to build.
Coding agents aren't just helping challengers.
Nvidia said developers increasingly use CUDA's code libraries to build AI applications, and that it also "uses AI coding agents to develop CUDA faster and validate at greater scale," said Ankit Patel, Nvidia's vice president of developer ecosystem.
Inference could change the CUDA equationIf CUDA's first advantage was software, the second is everything built on top of it. Millions of lines of code and internal workflows have been developed by companies, creating a powerful lock-in effect that makes switching to alternatives costly and cumbersome.
Internal documents at Amazon identified CUDA as a major roadblock to adoption of its Trainium and Inferentia AI chips, Business Insider previously reported.
CUDA's age is both an advantage and a constraint, said Chris Lattner, cofounder and CEO of Qualcomm-owned AI software startup Modular. Originally built for gaming long before the AI boom, CUDA carries layers of legacy technology, "like Microsoft Windows trying to fit onto a phone," he said.
Modular cofounder and CEO Chris Lattner. Modular Others say AI's shift from training toward inference — where models answer requests and draw conclusions — creates another threat.
With this evolution, companies care less about maximizing performance with the most powerful chips and more about running AI profitably, said Marshall Choy, chief business officer of Korean AI chip startup Rebellions.
This could result in greater demand not only for specialized hardware but for software that can run across different chips. If companies can switch between chips without rewriting software, that reduces one of CUDA's biggest lock-ins.
"That's where the CUDA moat from Nvidia gets broken because CUDA is no longer a factor in the inference side," Choy said. "It's an open source play."
Nvidia said that its tightly integrated hardware and software offerings have become more valuable as AI models get put to work.
"As AI shifts toward inference and agentic workloads, the need for deep, full-stack optimization only grows," Patel said.
A shift toward specialized chips and software has Wall Street increasingly questioning Nvidia's CUDA advantage, said Luke Lango, chief technology analyst at InvestorPlace. He said Nvidia's stagnant stock price over the past year reflects some of these concerns.
Nvidia's moat isn't disappearing — it's shiftingNot everyone agrees that coding agents are eroding CUDA's edge. Some believe they could ultimately strengthen it instead.
Though agents make it easier to generate software, AI-generated code still has to be verified and optimized, said Bing Xu, founder of AI software startup INT21. He believes CUDA has the deepest ecosystem of verification tools and other features that help coding agents work more efficiently.
As agents become more common, he said, that ecosystem will become CUDA's next moat.
"Agents can generate a lot of code in a short time, but verification is the biggest bottleneck," said Xu, whose last AI chip software startup, HippoML, was acquired by Nvidia. He left the chipmaker in April to build INT21.
INT21 founder and CEO Bing Xu. INT21 While coding agents do make it easier to build chip software, the improvement is incremental, Lattner said.
"The hype is not complete nonsense, but it is very overblown," he said, adding that writing code is only a small part of building software compared to more complex tasks like optimizing it for production — a critical task because software that maximizes a chip's performance reduces the cost of running AI at scale.
Chip software is also something of a niche field, often worked on by elite engineers, Lattner said, giving coding agents far fewer examples to learn from than, for instance, app development, where AI has been trained on vast amounts of public code.
And while AI may help rivals catch up, Nvidia benefits from the same technological shifts, Xu said. Whether coding agents weaken CUDA depends on whether competitors catch Nvidia faster than it can gain new ground.
The world's dominant chipmaker is "not sleeping or keeping still," Xu said.
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Geoff Weiss You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Geoff Weiss is a senior reporter on Business Insider’s tech team, where he writes about AI startups and Y Combinator, the intersection of AI and the media industry, and workplace dynamics within top AI labs and chip companies.Previously, Geoff was on the media desk, covering YouTube and Netflix, and themes like the intersection of Hollywood and the creator economy. His work on Netflix’s video podcasting ambitions and Mr Beast’s lessons for Hollywood won second and first prize, respectively, at the 2025 LA Press Club Awards.Prior to joining Business Insider, Geoff was the senior editor of Tubefilter and a staff writer at Entrepreneur. He graduated from New York University with a degree in English Literature.He can be reached at [email protected], on Signal @geoffweiss.25, and on LinkedIn. Have a tip? Use a personal email address and a nonwork device; here's our guide to sharing information securely.Selected stories:Nvidia crushed its quarter — and CEO Jensen Huang said in a leaked all-hands that 'the market did not appreciate it'Nvidia will foot the bill for Trump's new visa fees. Here's what CEO Jensen Huang told staff.Massive AI salaries and RTO are fueling a real estate boom in San Francisco: 'It's going to rain money'The AI talent wars are ricocheting across startups. Here's how they're competing with Big Tech.
Nvidia (NASDAQ: NVDA) is entering August with one of the strongest seasonal setups in its history while approaching a key technical support level ahead of what could be another record-breaking earnings report.
In this line, seasonality data from the past 20 years shows August has been Nvidia’s strongest month, with the stock posting gains in approximately 80% of observed periods, according to insights shared by charting platform TrendSpider on August 3.
By comparison, Nvidia recorded positive returns in roughly 71% of May periods, 70% of February and November periods, and 65% of September periods.
Nvidia 20-year seasonality chart. Source: TrendSpider The timing is notable because Nvidia enters August following a pullback from recent highs. Historically, periods when the stock approached major support levels ahead of its strongest seasonal month have often attracted renewed buying interest.
The seasonal trend is also significant because it coincides with Nvidia’s quarterly earnings cycle, which has frequently acted as a catalyst for upside moves when results exceeded Wall Street expectations.
Nvidia’s key technical outlook Beyond seasonality, Nvidia is testing a critical technical level. The stock has returned to its 200 EMA, a long-term trend indicator closely watched by institutional investors. Previous tests of this support level in 2026 attracted buyers and were followed by strong rallies.
The latest pullback has brought NVDA back near this zone, with the stock trading around $200 and the 200 EMA near $191. Historically, rebounds from the 200 EMA during broader uptrends have often presented attractive entry points for long-term investors.
Nvidia price analysis chart. Source: TrendSpider Importantly, Nvidia remains well above pre-AI boom levels and continues to trade within a long-term bullish structure.
Impact of Nvidia earnings The next major catalyst for the stock is its fiscal second-quarter 2027 earnings report, scheduled for August 26.
Management previously guided for revenue of approximately $91 billion. Wall Street expects revenue between $91 billion and $94 billion, with adjusted earnings per share of roughly $2.08 to $2.12.
Nvidia has consistently exceeded analyst expectations throughout the AI boom, driven by strong demand for its Blackwell AI systems, networking products, and data center infrastructure.
Some industry analysts also expect stronger second-half growth as supply constraints ease and next-generation Vera Rubin systems begin contributing to revenue.
The investment case remains tied to Nvidia’s dominance in AI infrastructure. The company generated a record $215.9 billion in revenue during fiscal 2026, up 65% year over year. Revenue accelerated further in the first quarter of fiscal 2027, reaching $81.6 billion, an 85% increase from a year earlier.
Data center revenue accounted for more than 90% of total sales, underscoring Nvidia’s leadership in AI training, inference, networking, and accelerated computing.
Profitability remains exceptionally strong, with gross margins around 75%. Nvidia has also continued returning capital to shareholders through dividend increases and an expanded $80 billion share repurchase authorization.
Nvidia stock NASDAQ:NVDA closed at $200.75 on Friday, rising 2.9% as strong cloud results from Microsoft and Amazon revived confidence in artificial-intelligence infrastructure spending.
Yet another, less visible part of the chipmaker’s growth strategy is emerging far from the data centres that dominate Wall Street’s attention.
Nvidia has joined CuspAI’s new AI Materials Foundry, a global network seeking to combine generative AI, accelerated simulations, scientific data and laboratory testing to discover materials for semiconductors, energy and advanced manufacturing.
The initiative is unlikely to change Nvidia’s earnings soon, but could extend the company’s reach into the scientific tools used to design the physical foundations of future technology.
CuspAI launched the foundry alongside a $450 million Series B fundraising that valued the Cambridge-based company at $2.6 billion.
More than 45 founding partners include Nvidia, Meta, Samsung Electronics, Applied Materials, Hyundai Motor Group, Tokyo Electron and Lam Research.
The group aims to shorten a materials-development process that can take years.
CuspAI’s approach covers generating candidate materials, simulating their properties, planning synthesis, validating results in laboratories and eventually preparing successful compounds for production.
Nvidia’s role is strategically important because those simulations demand substantial computing power.
Its ALCHEMI platform provides GPU-accelerated microservices and software tools for chemistry and materials research.
Nvidia says its batched geometry-relaxation technology can accelerate certain material-stability simulations by as much as 100 times.
The immediate stock argument is not that CuspAI will suddenly become a major customer. No expected revenue or purchase commitment from the partnership has been announced.
The opportunity is that materials discovery could become another specialised workload tied to Nvidia processors, CUDA-X software and cloud infrastructure.
Wall Street’s Nvidia thesis remains firmly elsewhereAnalysts’ bullish Nvidia calls still rest on established strengths rather than the materials alliance.
Bank of America analyst Vivek Arya said investors were overlooking an “enhanced” buying opportunity.
Arya argued that concerns about rising memory costs and competition from custom chips underestimated Nvidia’s pricing power, scale and supply-chain commitments.
KeyBanc analyst John Vinh raised his price target to $330 from $310 and maintained an Outperform rating. His confidence reflects the competitive barriers created by Nvidia’s hardware and CUDA software ecosystem.
ALCHEMI fits that broader logic as each specialist workload added to the platform may make Nvidia harder to replace.
Bernstein analyst Stacy Rasgon also maintained a Buy rating and $315 target despite concerns about Nvidia’s increasingly interconnected AI deals.
Also read: Nvidia, Alphabet among 5 stocks that fit Jim Cramer’s favourite dip-buying rule
AI-generated materials must still survive physical testing, regulatory reviews and mass-production requirements.
Moving from a promising simulation to a commercially useful semiconductor material could take years, and many candidates will fail.
There is also a broader risk as scientific computing will matter less to Nvidia shares if spending by its largest customers slows.
Jim Paulsen warned that flat or declining US core capital spending could force a “major readjustment” among investors committed to the AI-spending story, Business Insider reported.
Microsoft and Amazon offered a more encouraging signal as their latest cloud growth showed that heavy AI investment is producing revenue, supporting continued infrastructure demand.
Nvidia (NVDA +2.93%) closed at $197.01 on July 28, so a $1,000 investment would purchase approximately 5.08 fractional shares.
Image source: Getty Images.
In this article, "history repeats itself" does not mean Nvidia must reproduce an earlier stock return or return to one of its highest valuation multiples. Instead, it refers to Wall Street once again raising its earnings estimates and a modest valuation expansion as a major product cycle develops.
Nvidia has repeatedly surpassed Wall Street's forecasts After Nvidia reported its fiscal fourth-quarter results in February 2024, Wall Street's estimate for the company's earnings over the next 12 months rose from $22.52 per share to $27.19 by May 2024, an increase of nearly 21%.
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Nvidia's share price performance during the Blackwell product cycle provides a more relevant guide to its current situation. Introduced in March 2024, Blackwell combines artificial intelligence (AI) chips, CPUs, networking, and complete computing systems. Major cloud providers had already announced plans to adopt the platform, so Blackwell was launched with far higher expectations than Hopper. The setup is similar in 2026, as Wall Street already expects strong growth while Nvidia ramps production of its next-generation Vera Rubin platform ahead of broader deployments later in 2026.
However, analysts could still underestimate how much revenue Rubin generates from each deployment. The platform brings together GPUs, CPUs, networking, switches, storage systems, and software. Nvidia can therefore capture more revenue from a complete AI system, even without a major jump in GPU volumes.
Wall Street currently expects Nvidia to earn $8.99 per share in fiscal 2027 and $12.87 in fiscal 2028. At $197.01, the stock trades at roughly 22 times the fiscal 2027 earnings estimate.
The following calculation estimates Nvidia's share price one year from July 2026. Assume fiscal 2028 earnings-per-share (EPS) to exceed the current consensus estimate by 3.7%, matching the company's average EPS surprise over the previous eight quarterly reports. Hence, Nvidia's fiscal 2028 EPS could rise from $12.87 to about $13.35 per share.
Assuming Nvidia trades at 20 times its fiscal 2028 earnings estimate in July 2027, the projected EPS of $13.35 implies a share price of approximately $267. The 20 times multiple is below Nvidia's current valuation of about 21.9 times fiscal 2027 earnings and well below the levels seen during much of the Blackwell cycle. It reflects slower expected growth and the possibility that current forecasts already include much of Rubin's potential. So at approximately $267 per share, the original $1,000 investment would then be worth about $1,351, representing a return of roughly 35%.
But reaching that share price will depend on a fast Rubin rollout, continued hyperscaler spending, and higher Nvidia revenue per AI system. The main risks are weak customer returns on AI spending, increasing competition, and export controls.
Nvidia still seems to be a good long-term pick, but the uncertainty surrounding Rubin and AI spending favors gradual buying rather than an aggressive purchase at today's price.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) and Alphabet (NASDAQ:GOOG) both reported quarters that reshape how investors should think about AI leadership.
NVIDIA delivered $81.615 billion in revenue, up 85.23%. Alphabet pulled in $119.80 billion, up 24.2%. Same tailwind, very different business models, and the results expose the split.
Data Center Explodes for NVIDIA. Cloud Accelerates for Alphabet. NVIDIA’s Data Center segment hit $75.25 billion, up 92%, with networking alone growing 199% on InfiniBand, NVLink, and Spectrum-X demand.
Jensen Huang framed it plainly: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” Guidance for Q2 lands at $91 billion, and notably excludes any China Data Center compute revenue.
Alphabet’s headline was Google Cloud reaching $24.77 billion, growing 82%. Sundar Pichai emphasized adoption: “Nearly 90% of the Fortune 100 using it” referring to Gemini Enterprise, while Gemini models process 22 billion API tokens per minute. Search advertising still funds the whole machine at $63.27 billion, up 17%.
Picks and Shovels vs. Full Vertical Stack NVIDIA sells the compute. Alphabet builds on it, and also buys it. Pichai even said Google Cloud will be “among the first to offer NVIDIA Vera Rubin NVL72”, which makes GOOG both a customer and a competitor thanks to its own TPUs. That vertical integration is the pitch: “We’re unique in the market because of our vertically optimized AI stack.”
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Business Driver NVIDIA Alphabet Main Growth Engine Data Center chips and networking Cloud plus AI-enhanced Search Operating Margin 60.4% 32.1% YoY Revenue Growth 85.23% 24.2% NVIDIA hiked its dividend from $0.01 to $0.25 and authorized $80 billion in buybacks. Alphabet went the other direction, suspending buybacks and raising roughly $70 billion in debt and equity to fund a capex plan now guided to $180-190 billion for 2026. Free cash flow at GOOG turned negative at -$5.86 billion. That is the cost of racing to own the stack.
What I’m Watching Into the Back Half of 2026 For NVIDIA, I want to see whether the Blackwell 300 ramp and Vera Rubin roadmap can offset a shut-out China market. Total supply commitments already sit at $119 billion, which signals confidence but locks in execution risk. Post-earnings price behavior has been mixed too. Shares closed at $200.75, up just 13.01% over a year, well below Alphabet’s 85.46% one-year gain.
For Alphabet, the question is whether cloud backlog and Gemini monetization scale fast enough to justify depreciation from that capex surge. Long-term debt already jumped from $46.5 billion to $98.2 billion. That is a lot of leverage on a bet that AI infrastructure returns hold up.
Why I’d Own Both, but for Different Reasons NVIDIA offers the purest exposure to the AI infrastructure cycle. The margins are extraordinary at 75% non-GAAP gross, and the P/E of 41x is defensible against 85% revenue growth. If China ever reopens, that becomes upside on top of the current thesis.
Alphabet fits me better as a compounder. A P/E near 15 for a business growing revenue in the mid-20s with an accelerating cloud engine feels like the more forgiving setup. If capex fatigue hits AI names later this year, GOOG’s ad cash flows offer a cushion NVIDIA does not have. Both names carry real risk, and position sizing should track how much AI capex volatility an investor can absorb.
Don't wait: the analyst who called NVIDIA in 2010 just revealed his top 10 AI stocks. See the full list FREE now.
A new Nvidia (NASDAQ: NVDA) stock forecast generated by ChatGPT projects that the semiconductor giant could reach $225 by August 31, 2026.
The prediction is supported by continued investment in artificial intelligence infrastructure, strong data center demand, and expectations for another solid earnings report.
According to the analysis, Nvidia’s most likely closing price at the end of August is $225, with a projected trading range of $205 to $245, an increase of about 22% from NVDA’s last closing price of $200.
NVDA one-week stock price chart. Source: Finbold The forecast assigned a 25% probability to a bearish scenario of $190, a 50% probability to the base-case target of $225, and a 25% probability to a bullish outcome of $250.
A key driver behind the forecast is the continued expansion of AI infrastructure spending. In this line, Microsoft, Amazon, Meta, and other hyperscalers are expected to invest about $140 billion in AI-related capital expenditures in 2026, supporting demand for Nvidia’s graphics processing units and data center hardware.
The spending trend has helped Nvidia become one of the world’s most valuable companies, with investors continuing to view the firm as a leading beneficiary of enterprise AI adoption.
Meanwhile, Nvidia’s Blackwell platform continues to gain traction among cloud providers and enterprise customers. The company is also preparing to roll out its next-generation Rubin architecture, providing another potential growth catalyst.
Nvidia’s next earnings impact At the same time, the model also identified Nvidia’s August 26 earnings report as the most important near-term catalyst for the stock.
Investors will be watching for signs that Nvidia can sustain the rapid growth that has fueled its AI-driven rally. The company generated more than $80 billion in quarterly revenue in its latest reported quarter, with data center sales accounting for the majority of revenue.
Another strong earnings report could push the stock toward the upper end of ChatGPT’s projected range. Conversely, weaker-than-expected guidance could pressure shares toward the lower end of the forecast.
Beyond cloud computing demand, Nvidia is also benefiting from the rise of sovereign AI initiatives.
The company was recently linked to a $1 billion AI infrastructure agreement involving South Korean technology company Naver, highlighting growing investment by governments and national technology champions seeking to build domestic AI capabilities.
These projects represent an additional growth opportunity as countries increasingly prioritize AI development and computing independence.
While risks remain, including elevated valuations, growing competition, and uncertainty around long-term AI spending trends, Nvidia continues to benefit from some of the strongest growth drivers in the technology sector.
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It's not easy to complain about Nvidia (NVDA +2.93%). Its shares have skyrocketed 13,440% in the past 10 years (as of July 29), even though they trade 19% off their peak. This business has created many millionaires.
Additionally, the company is operating at full strength. During its fiscal 2027 first quarter (ended April 26), it reported revenue growth of 85% year over year. Its net income surged 211%. This is a booming business.
However, this artificial intelligence (AI) stock faces one big risk. And it's something that nobody's really talking about right now.
Image source: The Motley Fool.
Will the AI spending boom slow down? At the most fundamental level, Nvidia is thriving precisely because there's so much AI-related spending. The management team's commentary highlights how much money is flowing up the industry supply chain.
"With analysts now forecasting hyperscale capex to exceed $1 trillion in 2027 and agentic AI beginning to proliferate all industries, AI infrastructure spending is on track to reach $3 trillion to $4 trillion annually by the end of this decade," CFO Colette Kress said on the Q1 2027 earnings call.
It's hard to wrap your head around these figures. We're talking about trillions of dollars here. The scale of this AI cycle is unlike anything the world has ever seen.
But what if all this spending slows down? It's the most important unanswered question facing the economy right now. That's not an exaggeration.
Federal Reserve Board economists estimate that more than one-third of U.S. GDP growth in the first quarter was attributed to AI spending. And if Kress' forecast comes true, the $3.5 trillion (at the midpoint) spent in 2030 will represent a higher share of the nation's GDP than any previous capex build-out in history, exceeding the 1880s railroad boom.
The sustainability of this is the biggest unknown for Nvidia. If there's no longer a need for the picks and shovels powering the AI trade (the company's incredible data center graphics processing units), what happens to the one selling the most and best picks and shovels?
The endgame of AI is uncertain. No one knows what new businesses, products, and services will be enabled by this technology. But Nvidia's success rests on AI creating enormous value sooner rather than later. The end users of AI, mostly enterprises, will need to evolve from experimentation to outsize revenue growth or margin expansion.
Time will tell what happens.
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Something has to give From today's point of view, there are two possible outcomes.
On one side, the chip-buying hyperscalers will be able to flatten (and maybe reduce) their capital expenditures in the coming years. Then, they would return to durable free-cash-flow growth.
If this happens, companies that sell to them, like Nvidia and other chip stocks, will suffer.
Another scenario is that the hyperscalers keep spending like there's no tomorrow. Consequently, Nvidia will continue to gain financially.
It doesn't seem plausible for both of these situations to simultaneously stay true forever. Something has to give. For Nvidia, substantial revenue and market capitalization are on the line.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) at $190 screens well on fundamentals. The stock sits roughly 20% below its 52-week high near $236, yet fundamentals keep improving.
NVIDIA designs the GPUs, networking fabric, and software powering AI training and inference. Its Blackwell platform is the reference architecture for hyperscaler AI factories, and its data center franchise sits at the center of what CEO Jensen Huang calls “the largest infrastructure expansion in human history.”
Shares traded at $221.54 at the May earnings filing and drifted lower on macro anxiety around hyperscaler AI capex fatigue. That compressed the multiple even as revenue growth reaccelerates.
Why the Pullback Looks Like a GARP Setup Q1 FY2027 revenue landed at $81.61 billion, up 85.2% year over year, with Data Center at $75.25 billion (+92% YoY) and networking tripling to $14.8 billion. Free cash flow hit $48.55 billion in the quarter, and the board added an $80 billion buyback authorization.
Valuation is the surprise. Trailing P/E is 30, forward P/E is 22, and PEG ratio is 0.54. Return on equity of 101.5% and operating margin of 60.4% are monopoly-grade. Q2 guidance calls for $91 billion in revenue at 75% non-GAAP gross margin, and Meta, Anthropic, CoreWeave, and OpenAI (a 10GW deployment) all sit in the multi-year order book.
Where the AI Capex Bull Story Could Break The bear case starts with concentration. Hyperscalers are about 50% of Data Center revenue, and Arista Networks fell 6.42% on July 29 on cautious hyperscaler guidance, a warning shot on capex timing. China Data Center compute revenue has effectively gone to zero, and total supply commitments sit at $119 billion.
Retail skepticism is showing up. A widely read r/investing post argued “AI infrastructure depreciates way faster than people realise, and enterprise adoption is softening.” Alpha Vantage flags 26 recent insider transactions with a net selling direction, and Polymarket traders assign only a 14.5% probability that NVDA closes July above $200. Amazon Trainium and custom silicon remain threats.
What Would Justify Waiting The Hold case rests on volatility and timing. Beta is 2.21, and shares fell 10.4% in the last week alone. The next earnings call is August 26, 2026, and soft guidance on China SKUs or hyperscaler orders could reset the stock lower.
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Investors waiting for confirmation want a clean Blackwell 300 ramp, Vera Rubin design wins, and continued networking growth before adding. The cost of patience is real given a $302 consensus target, but the cost of buying into a capex pause is also real.
What the Data Says NVDA trades at $190.01 against a Wall Street consensus target of $302.83, implying roughly 59% upside. The ratings distribution across 61 covering analysts is 10 Strong Buy, 48 Buy, 2 Hold, and 1 Sell.
NVDA is up 8.4% over the past year and 2% year to date. Since the January 2025 earnings filing, the stock returned 34.39% versus 23.62% for the S&P 500, roughly 11 points of outperformance.
At $190, the Setup for NVIDIA The path to appreciation is mechanical. Forward EPS of $8.26 at a 30 multiple gets shares toward $248 without expansion. The August 26 earnings report, Blackwell 300 ramp, and Vera Rubin commentary are near-term catalysts, and $91 billion in guided Q2 revenue validates all three.
Risk/reward at $190 is asymmetric because most pain is priced in. The 52-week low is $163.85, roughly 14% below current levels, while the one-year target sits at $252.45. That favors a business printing 55.6% net margins.
The thesis breaks if hyperscaler capex contracts rather than recalibrates, or if a competitor closes the CUDA moat. Watch networking growth, gross margin trajectory toward the mid-70s, and Blackwell 300 shipment slippage.
At $190, NVIDIA trades at multiples consistent with a high-margin compounder, and history shows the stock has performed well from similar valuation setups.
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SummaryThe August 2026 Top 25 High-Growth Dividend Stocks list targets quality companies trading below intrinsic value for superior long-term total returns.The list offers a 1.28% average starting yield, 17.19% five-year dividend growth, and an estimated 22% annualized return, appearing 23% undervalued by dividend yield theory.Custom valuation models highlight significant discounts for select stocks like NVDA, INTU, and ACN, while caution is warranted for high P/FCF multiples in others.This quantitative screen serves as a research foundation, emphasizing long-term signals over short-term price noise for disciplined portfolio construction. KaiFixed/iStock via Getty Images
Quality Stocks After a sour June where the S&P 500 declined by ~1%, the woes extended into July with extreme volatility in technology stocks. However, a rebound late in the month coupled with strong gains from less favored companies
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Investors have long been bullish on Nvidia (NVDA +2.93%) for many reasons, but one that may not get a lot of direct attention is its backlog. Amid the massive demand for its AI accelerators, it accumulated a backlog of $500 billion in combined bookings for 2025 and 2026. Also, when CEO Jensen Huang was in Seoul in June, he stated that we are at the beginning of the AI boom, even as Nvidia stock has made massive gains over the last four years.
However, semiconductor stocks, including the chip giant, have pulled back in recent trading sessions as concerns about high capital expenditures (capex) and circular financing have given investors pause. Despite those concerns, investors should consider using this pullback to add shares. Here's why.
Image source: The Motley Fool.
The state of Nvidia Admittedly, the uncertainty surrounding Nvidia is understandable. The estimated $725 billion in planned capex by hyperscalers could raise doubts about access to credit. Moreover, Nvidia is an investor in many of its customers, leading to questions about whether the $500 billion is a true reflection of the backlog.
Nonetheless, other factors cast doubt as to whether Nvidia is really in trouble. Huang added that investors should be "very happy" since they can "buy at a discount." He appears to have a point. Its stock sells at a P/E ratio of 30, barely above the S&P 500 average of 29.
Despite that valuation and Huang's assertion about the AI boom, Nvidia is not trading at a premium. In the first quarter of fiscal 2027 (ended April 26), its revenue of $81.6 billion rose by 85% from year-ago levels. That led to $58.3 billion in net income, a 211% annual increase. Also, since revenue surged 65% higher in fiscal 2026, its quarterly growth is more than a one-time event.
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Considering Nvidia's growth rate, it likely does not need to artificially inflate its growth. Additionally, the "circular financing" is a reflection of its AI needs.
For example, it is an investor in the neocloud company CoreWeave, which is also a customer. In a technical sense, Nvidia does not "need" CoreWeave to grow.
Still, CoreWeave gives Nvidia a platform where it can more quickly deploy and test its hardware. Also, since the neocloud industry is new, the leading companies do not have the backing to scale quickly on their own.
With Nvidia's support, they can build faster, facilitating faster adoption of its technology. This means that such investments could pay off for Nvidia longer-term and, ultimately, ease the concerns of investors.
Moving forward with Nvidia Despite doubts, Nvidia's backlog is a reason to buy its stock.
Indeed, concerns about credit accessibility could slow growth and discourage some investors from buying its stock. Also, its so-called "circular financing" makes it look like Nvidia has to buy its growth.
However, the stock's P/E ratio seems to confirm that it sells at a discount. Also, it appears investments like its position in CoreWeave contribute to the improvement and rapid deployment of its hardware.
Thus, despite the concerns, investors should continue to believe in Nvidia's growth. Considering its comparatively low P/E ratio, investors have good reason to look past the uncertainty and take a position in the chip stock.
Jim Cramer’s favourite dip-buying rule starts with a margin decline, but it does not end there.
Investors must decide whether profits are temporarily compressed by investment or permanently damaged by weak demand and competition.
Meta Platforms, Alphabet and SoFi are the clearest tests after their shares were punished by spending increases or cautious guidance.
Intel illustrates how the market can reward a recovery, while Nvidia is a corrected leader rather than a beaten-down stock.
These five companies fit the framework based on Cramer’s framework, but he did not individually recommend them as a group.
Meta stock fell 9.5% after second-quarter results as investors focused on a 91% collapse in free cash flow to $784 million and capital expenditure approaching $145 billion this year.
Yet advertising revenue rose 27% to $59.36 billion, showing that the core business remains healthy.
Deutsche Bank analyst Benjamin Black maintained a Buy rating and an $800 target before the results.
Business Insider reported that Black believed Meta’s discount failed to reflect the durability of advertising and monetisation from AI, subscriptions, business agents and cloud infrastructure.
The opportunity fits Cramer’s rule, but only if Meta turns computing investment into measurable revenue.
Alphabet dropped after raising its 2026 capital-spending forecast to $195 billion-$205 billion, even as Google Cloud revenue surged 82% to $24.8 billion.
The company also recorded negative free cash flow of $5.9 billion.
Wedbush analyst Ygal Arounian wrote in a note cited by Barron’s that investment was scaling because “compute remains constrained” and demand remained strong.
That supports the argument that Alphabet is spending to serve customers rather than defend a shrinking business.
However, depreciation and infrastructure costs must eventually be matched by sustainable cloud profits, making the stock vulnerable if growth slows before spending peaks.
SoFi fell 9% despite beating earnings and revenue expectations, as investors concentrated on cautious second-half guidance and a 23% decline in technology-platform revenue.
William Blair analyst Andrew Jeffrey retained an Outperform rating and encouraged investors to buy the weakness.
He argued that expanding originations and retaining more loans could support stronger returns.
KBW analyst Tim Switzer offered the warning, calling the result a “lower-quality beat” because growth relied heavily on SoFi’s balance sheet.
SoFi is the most traditional dip candidate here, but its recovery requires better platform growth and disciplined credit performance.
Intel is not beaten down, with its shares having rallied in 2026. It instead demonstrates what can happen when a margin-recovery thesis gains credibility.
Morningstar analyst Brian Colello raised his fair-value estimate to $105 from $90 after what he called a “stunning rise in server CPU demand”.
AI data centres still require conventional processors alongside accelerators, supporting Intel’s server business.
The risks remain substantial as foundry investment, manufacturing execution and competition from AMD, Arm-based designs and Nvidia.
Investors applying Cramer’s rule today would need another pullback rather than chasing a recovery already reflected in the price.
Nvidia’s recent correction revived the argument that temporary fear can create an entry into a dominant company.
Concerns centre on hyperscaler cash flow, investments in customers and whether interconnected AI financing is supporting demand.
Bernstein analyst Stacy Rasgon maintained a Buy rating and a $315 target in July, implying upside from the price at the time.
Nvidia remains the highest-quality business in this framework but the least conventionally beaten down.
Its test is whether spending by cloud companies reflects durable end-user demand.
Cramer’s rule works only when weaker margins fund future growth, not when they reveal a business losing its competitive edge.
During the company's GTC conference in March, Nvidia (NVDA +2.93%) CEO Jensen Huang expressed confidence in the company's opportunity in the artificial intelligence (AI) chip market.
"We saw $500 billion of very high confidence demand and purchase orders for Blackwell and Rubin through 2026," Huang said. "I'm here to tell you that right now where I stand ... I see through 2027 at least $1 trillion."
Recent results indicate that Nvidia is very much on pace to hit that target -- but some risks could derail its momentum.
Jensen Huang speaking at a conference. Image source: Nvidia.
Nvidia's growth path Over the past year, Nvidia's data center revenue made up roughly 90% of its total revenue, and its Blackwell chips have been the main engine behind that growth. In the fiscal first quarter of 2027 (which ends in January), data center revenue grew 92% year over year to $75 billion.
In fiscal 2026, which mostly aligns with calendar 2025, Nvidia generated $216 billion in total revenue, with nearly $194 billion from data centers. Wall Street's consensus estimate currently forecasts total revenue of $394 billion this year and $561 billion next year -- about $1.17 trillion in cumulative total revenue since last year.
If Nvidia's data center segment remains about 90% of total revenue, that implies cumulative data center sales from last year -- largely from Blackwell and the new Rubin chips -- will exceed $1 trillion by the end of next year.
Management has stuck with that forecast. During the company's fiscal first-quarter earnings call, CFO Colette Kress said, "We are continuing to work vigorously on our supply chain ecosystem to address the incredible demand we see ahead of us, giving us full confidence in the $1 trillion in Blackwell and Rubin revenue we foresee from 2025 through calendar 2027."
However, Kress' comment about working on its supply chain implies the risks that could prevent Nvidia from meeting its forecast.
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Risks to watch A key risk is execution. AI demand has created one huge bottleneck from data center construction to memory and other components needed to build advanced chips. Demand for Nvidia's hardware looks enormous, but the open question is whether Nvidia can ship enough to meet it.
Another risk is competition from Nvidia's own customers, such as Amazon and Alphabet's Google, which are designing custom AI chips for their cloud platforms. Top cloud companies have previously made up about half of Nvidia's data center revenue. If those customers shift more workloads to in-house silicon, Nvidia's growth could slow.
That's also why Nvidia has been striking partnerships with neocloud and sovereign customers, including IREN and leading Japanese manufacturers. Nvidia needs to reduce its dependence on sales to big tech companies that are increasingly focusing on their own chips.
The $1 trillion cumulative sales target is still in play -- but it isn't guaranteed. If the data center market slows or supply constraints limit Nvidia's ability to fulfill orders, it could pressure growth and the stock.
John Ballard has positions in Amazon, Iren, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.
Nvidia (NVDA +2.93%) investors haven't had the success they're used to in 2026. Over the past three years, the stock easily crushed the market in the first half of the year, but that's not the case in 2026. So far in 2026, Nvidia has lost to the market, as measured by the S&P 500. Additionally, it has barely made investors any money, only rising about 2% for the year while the S&P 500 is up around 7%.
That's a disappointing run to date, but I think Aug. 26 could be when Nvidia turns it around. That's when it reports earnings for the second quarter of fiscal year 2027, and it could be the catalyst this stock needs to skyrocket.
Image source: Nvidia.
Nvidia consistently exceeds expectations Nvidia is thriving from the AI data center build-out, as it supplies GPUs and other infrastructure and software to support them. Nvidia's GPUs are the gold standard in AI computing, and nearly every company in the AI realm runs at least part of its workloads on Nvidia hardware. Demand for Nvidia's products continues to ramp up. This is evidenced by AI hyperscalers continuing to raise their spending outlooks for 2026 and hinting that spending in 2027 will be even higher. That bodes well for Nvidia's future growth and reassures investors that 2026 will not be the end of the trend.
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For the second quarter of fiscal year 2027 (ending in late July), Wall Street analysts expect an impressive 96% growth rate. Nvidia has a strong track record of exceeding expectations, so I wouldn't be surprised if its revenue growth rate returns to the triple-digit range. That would make headlines, but what investors will really be focused on is its Q3 guidance. Right now, analysts estimate 81% revenue growth for Q3. If Nvidia projects something in the 90% range again, the stock should see a quick rise, as none of that is currently priced in.
Nvidia trades at 21.1 times forward earnings, the same multiple as the S&P 500.
NVDA PE Ratio (Forward) data by YCharts
This is the market communicating that if Nvidia hits expectations, it's going to price it like a market-average stock. However, investors know that Nvidia consistently exceeds expectations and is poised for further growth next year, driven by AI hyperscaler guidance.
I think this sets the stage for an end-of-the-year rally in Nvidia's stock, and it could all kick-start in late August. If you've missed out on Nvidia's stock so far, now is the perfect time to load up on shares, as I doubt it will stay this cheap for much longer.
Nvidia (NVDA +2.93%) is only up by 4% year to date, but comments from tech analyst Dan Ives suggest that the sluggish returns won't last for long.
"Demand to supply today is 12 to 1 for their chips. Physical AI hasn't even started to play out," Ives said on CNBC. The long-established tech bull also believes the AI revolution is only in the third inning.
His comments suggest Nvidia can break out of its market underperformance, and there's some evidence pointing in that direction.
Image source: Getty Images.
Tech giants are committed to high capital expenditures Nvidia's biggest customers are rushing to spend as much money on AI as possible. While Nvidia's GPUs aren't the only part of capital expenditures, they are a large focus for tech giants.
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Alphabet raised its full-year capital expenditure guidance to $195 billion-$205 billion. That's a meaningful jump from the $180 billion-$190 billion in guided capital expenditures earlier in the year. Amazon also raised its projected capital expenditures to $220 billion, with higher memory costs playing a big role.
All of these AI expenditures are coming with revenue acceleration. Microsoft also set ambitious capital expenditure targets but told investors it would achieve positive free cash flow in fiscal 2027. That news eased investors' concerns about AI costs, as Microsoft confirmed it wouldn't need to rely on dilution or bonds to fund AI spending.
Nvidia's fundamentals continue to improve There is a meaningful mismatch between Nvidia's 4% year-to-date returns and its financial performance. The ongoing supply shortage suggests Nvidia can maintain its current momentum, putting it at further odds with its recent returns.
Revenue surged by 85% year over year in the company's fiscal 2027 first quarter (ended April 26, 2026). Net income more than tripled year over year, resulting in a 22 forward P/E ratio. Its P/E ratio is a similar value to the S&P 500's P/E ratio, even though Nvidia grows faster than almost every company on the index.
When companies like Nvidia deliver high revenue numbers, some investors wonder how long it will last. Ives' commentary suggests this is still early, which is a good sign for Nvidia investors. If the shortage is really 12:1, there are a lot more chips that tech companies need to buy. Physical AI like humanoid robots and self-driving vehicles can expand the shortage and give Nvidia more years of exceptional revenue growth.
As investors realize Nvidia's growth can last for multiple years, they will rerate the stock higher from current levels.
Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
Nvidia: Consistent Sequential Revenue IncreasesNvidia (NVDA +2.93%) primarily generates revenue by selling advanced graphics, computational, and networking solutions for gaming and high-performance computing.
It introduced new computational processors in June of 2026, and it reported a net income margin of 72% for the quarter ended April 26, 2026.
Alphabet: Scaling a Larger Revenue BaseAlphabet (GOOGL +6.73%) earns most of its revenue by providing digital advertising services, cloud computing infrastructure, and consumer hardware.
While multiple law firms announced securities fraud investigations into the company in July, 2026, it reported a net income margin of 94% for the quarter ended June 30, 2026.
Why Revenue Matters for Retail InvestorsRevenue represents the total amount of money a company brings in before expenses are deducted. This metric helps investors measure a company’s overall size, market footprint, and long-term trajectory.
Quarterly Revenue for Nvidia and AlphabetQuarter (Period End)Nvidia RevenueAlphabet RevenueQ3 2024$30.0 billion (period ended July 2024)$88.3 billion (period ended Sept. 2024)Q4 2024$35.1 billion (period ended Oct. 2024)$96.5 billion (period ended Dec. 2024)Q1 2025$39.3 billion (period ended Jan. 2025)$90.2 billion (period ended March 2025)Q2 2025$44.1 billion (period ended April 2025)$96.4 billion (period ended June 2025)Q3 2025$46.7 billion (period ended July 2025)$102.3 billion (period ended Sept. 2025)Q4 2025$57.0 billion (period ended Oct. 2025)$113.9 billion (period ended Dec. 2025)Q1 2026$68.1 billion (period ended Jan. 2026)$109.9 billion (period ended March 2026)Q2 2026$81.6 billion (period ended April 2026)$119.8 billion (period ended June 2026)Data source: Company filings. Data as of July 31, 2026.
Foolish TakeIn comparing revenue trends between Nvidia and Alphabet, the latter’s digital advertising-fueled business causes spikes in the fourth quarter due to the seasonal nature of the ad industry. Otherwise, both are seeing strong year-over-year sales growth.
In fact, Nvidia is experiencing steadily rising quarter-over-quarter revenue increases in a sign of the massive demand for its artificial intelligence offerings. Alphabet is among the semiconductor giant’s customers. Nvidia’s new Vera Rubin AI platform is expected to contribute to ongoing sales growth. The company forecasted revenue to continue accelerating from $81.6 billion in its most recent quarter to $91 billion in the next.
Alphabet is getting an enormous boost from AI demand as well, but it’s not as evident amid its advertising sales. In Q2, the company’s Google Cloud business enjoyed 82% year-over-year revenue growth to $24.8 billion, and its backlog of customer orders rose to over half a trillion dollars, up from $462 billion in Q1. Google Cloud is the division where customers can pay to access Alphabet’s proprietary AI models, and its rapid sales expansion demonstrates the company is successfully capturing its share of clients in the burgeoning AI market.
Nvidia (NVDA +2.93%) is one of three public-market gateways into "MANGOS", a private-heavy AI group challenging the Magnificent Seven. The video explores how a new group of companies fits into the ecosystem and why gains in the next generation of AI may emerge far beyond traditional megacap technology.
Stock prices used were the market prices of July 17, 2026. The video was published on July 30, 2026.
Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
If you're an Nvidia (NVDA +2.93%) investor, listening to what the artificial intelligence (AI) hyperscalers say is a must-do. These companies are huge clients, purchasing billions of dollars' worth of computing equipment from it. Microsoft (MSFT +3.02%) just made a big announcement regarding its plans, and it bodes well for the chipmaker.
This should be music to Nvidia investors' ears, but the market may not be as receptive.
Image source: Getty Images.
The market is still skeptical about AI spending Currently, the market isn't accepting hefty data-center capital expenditure (capex) plans with open arms. It believes most companies are overspending and will have to deal with excess computing capacity years down the road. However, none of the AI hyperscalers believe that and are continuing to ramp up capex.
Microsoft is the latest example of this trend. It reported fourth-quarter results for fiscal 2026 on July 29, and chief financial officer Amy Hood said that for fiscal 2027, capex will grow year over year due to "demand signals across our portfolio." That clearly indicates that Microsoft does not have sufficient computing power and that there is still strong demand to support major growth.
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With Microsoft ramping up its capex plans, Nvidia will be one of the primary beneficiaries. It also gives credence to Nvidia's projection that there will be $1 trillion or more in data center capex from the AI hyperscalers in 2027, up from an estimated $650 billion in 2026.
Despite this bullish outlook, the market hasn't priced any future success into the chipmaker's stock. It now trades for 21.1 times forward earnings, the same valuation as the S&P 500.
Data by YCharts; PE = price to earnings.
So, the market is essentially saying that after this year, Nvidia will be a market-average stock. However, investors have information from companies like Microsoft indicating that data center spending will increase due to high demand, which will boost Nvidia's sales.
Wall Street analysts also project 42% revenue growth during fiscal 2028 (ending January 2028), indicating huge growth again next year. Clearly, Nvidia will be a monster stock next year, so if you can load up on shares for a cheap price tag like you can right now, it makes a ton of sense to do so.
There are few better bargains in the market right now. Nvidia's next major catalyst is its second-quarter earnings report on Aug. 26, and getting into the stock before that date would be a smart move.
Nvidia (NVDA +2.93%) was a relatively obscure chipmaker specializing in gaming technology before artificial intelligence (AI) exploded a few years ago, sending the stock to the No. 1 spot as the world's most valuable company. It held on to that title for most of 2025 as Nvidia enjoyed outstanding growth, while the next-most-valuable company, Apple, struggled to gain traction in AI.
However, Apple stock is back in the market's favor, gaining 27% over the past three months, while Nvidia stock has dropped 8%. Apple is now back in the world's most-valuable-company slot.
As the market hears more updates from the largest tech companies, is there more bad news on the way for Nvidia?
High AI spend is good for Nvidia AI chip stocks have been plummeting recently as the market prices in worries about AI spending and how long the cycle can last. However, while companies like Alphabet and Amazon continue to spend lavishly on upgrading their AI platforms, with both companies planning to spend around $200 billion in 2026 alone, the updates are actually a good sign for Nvidia.
Image source: Nvidia.
Nvidia works with both Amazon and Alphabet, as well as nearly every major AI company. Both clients, for example, make some of their own AI chips, but they also contract with Nvidia to offer their cloud clients the best available AI development platform. Nvidia is the gold standard, and while Amazon's chips offer budget options and Alphabet's Tensor Processing Units (TPUs) offer specialized task efficiency, Nvidia offers the most powerful capabilities. As these companies invest, a large chunk goes to Nvidia.
Nvidia's CEO Jensen Huang noted that total AI spend is expected to be $1 trillion next year and $3 trillion to $4 trillion by the end of the decade. He thinks that Nvidia will generate $1 trillion in revenue from 2025 through 2027 from the Blackwell and Rubin lines alone, and every time a hyperscaler announces greater investments in AI infrastructure, investors should envision some of that landing on Nvidia's doorstep.
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Why Nvidia stock is dropping anyway Although Nvidia should enjoy continued growth if AI spending stays strong, the market is worried that this can't continue. A separate but connected piece for Nvidia is that revenue growth is accelerating right now, but as soon as that slows down, the stock won't be worth quite as much. On a price-to-sales basis, Nvidia stock trades at 19 times trailing-12-month sales.
Nvidia may continue to face pressure as the market weighs the future of AI, and investors should temper their expectations in the near term.
Jennifer Saibil has positions in Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Nvidia. The Motley Fool has a disclosure policy.
Nvidia (NVDA +2.93%), arguably the most popular artificial intelligence (AI) stock on the planet, is also the most valuable company on the planet. Its growth trajectory, however, could just be getting started.
According to research from Stanford University, today's AI models already meet or exceed human baselines on Ph.D.-level science questions, multimodal reasoning, and competition mathematics. But there's still a long way to go until these models control huge swaths of the economy. One model, for example, recently won a gold medal at an international math competition. Yet that same model was able to read analog clocks correctly just 50.1% of the time.
In short, we are still very much in the early innings of both AI adoption and AI capabilities. McKinsey & Company forecasts that more than $5 trillion will be spent globally through 2030 alone on building additional data center infrastructure. Through 2040, a staggering $19 trillion is projected to be deployed to fuel the AI revolution.
As the world's largest AI chip manufacturer, Nvidia sits at the center of this ongoing revolution. Later this month, the company reports second-quarter earnings after market close. Here are the two biggest factors investors should be monitoring.
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1. What is happening with Blackwell and Vera Rubin? Nvidia's Blackwell architecture was officially announced in early 2024. Shipments began later that year. These chips quickly sold out, and at one point, reports suggested that a backlog existed that could persist for 12 months or longer. If there was any doubt that Nvidia's graphics processing units (GPUs) were dominant, Blackwell's initial sales traction put those doubts to rest.
Nvidia's Vera Rubin architecture was also teased in 2024. Sales, however, only began earlier this year. While reports have suggested production issues, Nvidia CEO Jensen Huang recently confirmed that "Vera Rubin is already in production," adding that there are "giant amounts of production incoming."
While the two are designed for different purposes, Nvidia's next earnings report should shed light on whether Vera Rubin sales are competing with Blackwell sales. We'll also get a better idea of Vera Rubin's sales pace and potential backlog, as well as more firm updates on production. The specifics of these updates should have a big effect on the market's understanding of Nvidia's current competitiveness and future sales potential.
Image source: Getty Images.
2. Is management concerned with rising competition? While other experts will be keeping a close eye on margins, China exposure, and future product teasers, I'll be monitoring Nvidia management's comments on rising competition for GPU manufacturing.
Scores of companies, ranging from space stocks like SpaceX to electric vehicle makers like Rivian, are planning to design and build their own AI chips in-house. These companies will remain heavily reliant on Nvidia over the coming years until their internal manufacturing facilities are built and up to spec. How concerned is Nvidia regarding the long-term potential of key clients manufacturing their own chips?
"Company after company has lined up to challenge Nvidia's grip on AI chips," reports Quartz. "The big cloud providers building their own chips aren't walking away from Nvidia entirely," the publication stresses. But they are looking to reduce their reliance on Nvidia, which, by most estimates, holds 70% to 95% of the AI chip market.
The AI market is growing so quickly that Nvidia can afford to lose share and still grow in absolute size. This quarter -- and in future quarters -- I'll be closely monitoring how management is discussing rising competition, especially from key customers.
Before ChatGPT launched, Nvidia (NVDA +2.93%) was worth $386 billion.
Today, largely because of the generative AI boom unleashed by ChatGPT, the company is worth more than ten times that, currently valued at nearly $5 trillion.
Now, there's another technological revolution unfolding that Nvidia is also leading, and it could be a significant long-term driver for the stock. I'm talking about the autonomous vehicle and robotics market, or, more broadly, what CEO Jensen Huang calls physical AI.
Image source: Nvidia.
Nvidia and physical AI Nvidia is best known for its GPUs and the related components that power AI compute in the data center, but the company has also built a substantial advantage in physical AI components.
Its Jetson Thor supercomputer, for example, is widely considered the market leader for raw AI inference and robotics simulation. Nvidia sells Jetson Thor to a wide range of robotics companies, including Boston Dynamics, Amazon Robotics, Caterpillar, Deere, and others.
Those companies are using Jetson Thor for applications like computer vision to help operate robots and machines in Amazon's warehouses or agricultural fields for Deere.
Jetson Thor has also been adopted by tech companies like Meta and OpenAI, as well as healthcare companies like Medtronic.
While the robotics market is growing rapidly, the bigger prize here for Nvidia seems to be autonomous vehicles, an industry that could be approaching a tipping point. Alphabet's Waymo is now handling 500,000 weekly paid rides, more than doubling from a year ago, and it operates in 10 metro areas. Tesla's robotaxis are now available in seven cities, and other AV companies are expanding rapidly as well.
While Waymo and Tesla aren't direct AV partners of Nvidia, the chipmaker has signed up a number of key AV companies, including Uber, Toyota, Stellantis, Mercedes-Benz, and two Chinese EV makers, BYD and Geely.
Its most important automotive partnership is with Uber, as the ridesharing giant is working with Nvidia and OEMs like Stellantis to deliver at least 5,000 Level 4 autonomous vehicles for a robotaxi network. Nvidia's DRIVE AGX Hyperion AV platform will provide the brains for the AVs as it does for the other companies listed above.
What the numbers say Nvidia's automotive business is still small, reporting just $2.3 billion in revenue in fiscal 2026, which was up 39% from the year before. In fiscal 2027, which started earlier this year, Nvidia restructured its reporting segments to combine the three non-data-center segments (Gaming and AI PC; Professional Visualization; Automotive and Robotics) into one, Edge Computing.
As a result, investors won't get the same level of transparency on the automotive business, but Nvidia is providing updates on it.
Though it's small now, the physical AI business is likely to deliver returns over a longer time horizon, as Jensen Huang recently said it's now generating $10 billion in annual run rate revenue, and he sees it growing to $100 billion within the next decade.
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Nvidia is already valued at $5 trillion, and it trades at a forward P/E of just 22, less than the S&P 500, even though analysts expect revenue to grow 82% this year.
That mismatch seems to owe to the historical cyclicality of the semiconductor sector and the risk of an AI bubble. Investors are hedging their bets that Nvidia's bumper profits will eventually decline, or at least that its growth will slow significantly.
The physical AI business provides an antidote to this. It's a totally separate vertical from data centers and generative AI, and should be less cyclical, as transportation is a constant need. Additionally, the company uses a recurring software-as-a-service model for part of its AV business, including the Drive AV stack.
That could give the physical AI business a significantly higher multiple than Nvidia's hardware business, as software typically trades at a higher valuation than hardware. If it reaches $100 billion in revenue, the physical AI business could earn a market value of $2 trillion or more, depending on its growth rate and profitability.
By making Nvidia more resilient to an AI downturn, the business should also help lift its valuation. Combine those benefits with the continued growth in the core data center segment, and it's not hard to see the company reaching $10 trillion in a few years.
NVIDIA (NVDA), a leading designer of processors for artificial intelligence and data centers, rose approximately 1.8% by Friday's close after Morningstar descri
For Nvidia (NVDA +2.93%) to hit $10 trillion by 2030, it would need to more than double its market cap (about $4.7 trillion) over the next four-ish years. That works out to an annualized return of about 18%, which would price the stock at about $410 per share, assuming Nvidia's share count stays roughly unchanged (i.e, no dilution).
For almost any company, adding $5 trillion or more in market value would sound unrealistically demanding. For the world's most dominant supplier of AI accelerators, however, the growth required isn't as outrageous as it might seem. Let's take a look.
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The math behind Nvidia's path to $10 trillion The first thing working in Nvidia's favor is that its underlying market is growing rapidly.
The research firm Gartner, for instance, forecasts worldwide spending on artificial intelligence (AI) will hit about $2.6 trillion in 2026, a 47% increase since last year. What's more important for Nvidia is that Gartner predicts spending on AI-optimized servers will also triple over the next five years. Many of these servers are built around graphics processing units (GPUs) like Nvidia's, along with the networking equipment needed to link them. It follows, then, that if spending on AI servers increases over the next five years, Nvidia's total addressable market (TAM) would likely expand substantially with it.
Image source: Nvidia.
Some back-of-the-envelope calculations can make clear what Nvidia needs to do to support a $10 trillion market valuation. At a price-to-earnings (P/E) ratio of 30, which is about what it trades at today, Nvidia would need to generate about $333 billion in profit to support a $10 trillion market cap. A more conservative multiple of 25 times earnings would put the figure closer to $400 billion.
For perspective, Nvidia's net income in fiscal 2026 was about $120 billion. Its total revenue was about $216 billion, with a net margin of about 56%.
On that note, take a look at Wall Street's revenue predictions for Nvidia over the next two fiscal years.
Data by YCharts
As you can see in the chart, analysts expect Nvidia's revenue to grow at an annualized rate of about 32% from a fiscal 2027 estimate ($393 billion) through fiscal 2029 ($688 billion). If Nvidia were to generate around $688 billion in fiscal 2029 and convert 50% into net income, it would earn about $344 billion. Put a 30-times earnings multiple on that $344 billion in profits, and you get a market cap of $10.3 trillion.
Should you buy Nvidia at today's price? Of course, these are estimates, not definite numbers. A lot can change in four years, and there's no guarantee Nvidia will beat competitors and remain as dominant as it is now.
Still, I think Nvidia looks attractive for investors willing to hold for at least five years. If the AI infrastructure market grows as predicted and Nvidia remains its predominant chip supplier, annualized returns in the high teens seem pretty doable. The stock might not deliver quadruple gains like it has over the past few years, but doubling by 2030 seems achievable to me.
Key Takeaways Sandisk expects higher Q4 revenues and EPS as AI memory demand and pricing strength continue. NVIDIA posted record data center revenues and guided for higher Q2 sales with steady gross margins.Analysts see greater upside for SNDK than NVDA based on current average and highest price targets. As artificial intelligence (AI) reshapes the technology landscape, both NVIDIA Corporation (NVDA - Free Report) and a much smaller company, Sandisk Corporation (SNDK - Free Report) , have benefited from the transformative trend. But which AI stock provides greater upside potential in the future? Let’s take a closer look –
The Bullish Case for NVDA Stock Strong demand for NVIDIA’s cutting-edge AI chips and platforms is driving revenue growth. For the fiscal first quarter of 2027, NVIDIA’s revenues were $81.6 billion, up 85% year over year and 20% sequentially, according to the company’s press release.
NVIDIA’s data center revenues hit a record $75.2 billion, up 92% year over year and 21% quarter over quarter. NVIDIA’s dominance in the data center business indicated that spending on AI infrastructure was strong, and cloud providers invested heavily in the company’s graphics processing units.
Management further expects AI demand to remain robust, as they project NVIDIA’s fiscal second-quarter 2027 revenues to come in at $91 billion, plus or minus 2%. But NVIDIA isn’t just increasing sales; it’s also maintaining a healthy profit margin. NVIDIA expects its non-GAAP gross margin to be 75%, plus or minus 0.5% in the fiscal second quarter, unchanged from the 75% reported in the fiscal first quarter.
The Bullish Case for SNDK Stock Sandisk has successfully expanded its presence among high-value customers as demand for its AI-related memory solutions continues to grow. A favorable pricing environment is further supporting its growth prospects, making it a desirable AI memory investment.
For the fiscal third quarter of 2026, Sandisk’s revenues were $5.95 billion, up 97% quarter over quarter and well above its own expectations, according to investor.sandisk.com. The company further expects revenues to improve to $7.75 billion to $8.25 billion in the fiscal fourth quarter of 2026.
The company’s earnings growth is also improving sequentially, with management projecting non-GAAP earnings per share of $30 to $33 for the fiscal fourth quarter compared with $23.41 in the fiscal third quarter.
NVIDIA or SanDisk: Which AI Stock Has Greater Upside? NVIDIA’s strong data center growth, steady profit margins and upbeat outlook should act as a catalyst for the stock. But let’s admit that, so far, that hasn’t been the case. Since releasing its fiscal first-quarter earnings, NVIDIA’s stock has declined and is up a meager 4.9% year to date. This is because after years of exceptional growth, investors’ expectations for NVIDIA’s earnings are extremely high. They are also concerned that any slowdown in future AI spending could weigh on NVIDIA’s performance.
While NVIDIA’s management expects to maintain a steady profit margin, current U.S. export curbs on chip sales to China have limited NVIDIA’s access to a potential market, creating pressure on margins. Additionally, geopolitical tensions could disrupt supply chains, giving NVIDIA little room for expansion.
On the other hand, Sandisk’s latest quarterly results show that strong AI memory demand is driving revenue and profitability growth, supporting a positive share price outlook. Moreover, its multi-year strategic partnerships through New Business Model agreements in the fiscal third quarter are strengthening customer relationships, enhancing revenue visibility, and increasing the predictability of long-term cash flows, which supports further upside in its share price.
Sandisk’s shares have already soared 457.4% this year, yet the company has more room for growth as it benefits from the AI memory boom, even as NVIDIA remains a dominant AI chip company.
Brokers also see greater upside potential in Sandisk than NVIDIA. The average short-term price target for SNDK stock is $2,389.42, representing a 135.2% upside from its last closing price of $1,015.89. The highest price target stands at $3,169, suggesting a potential upside of 211.9%.
Image Source: Zacks Investment Research
The average short-term price target for NVDA stock is $305.85, implying a 61% upside from its last closing price of $190.01. The highest price target stands at $500, representing a potential upside of 163.1%.
Image Source: Zacks Investment Research
For now, both Sandisk and NVIDIA have a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
HomeIndustriesComputers/ElectronicsTech StocksTech StocksAlibaba has an agreement for Moonshot to use its Nvidia H200s, according to Bloomberg — but the Chinese tech giant pushed back against the reportJuly 31, 2026, 4:23 p.m. ET
The release of Chinese artificial-intelligence model Kimi K3 earlier this month raised questions about China’s increasing self-sufficiency in advanced technology, even as the U.S. attempts to curb its access to top tools.
But a new report suggests U.S. technology may have had a role in the origin of Kimi K3, which performed comparably to leading U.S. AI models on benchmarks — despite being purportedly far cheaper to train.
Six of the Magnificent Seven companies have now reported earnings, and the results have been broadly impressive. Despite their enormous size, these businesses continue to deliver exceptional growth, with the AI boom simultaneously strengthening their long-term opportunities and placing greater demands on cash flow, though the impact varies considerably across the group.
Even so, the market has responded harshly to some otherwise strong reports, which brings me to an important point before reviewing the results and identifying which stocks stand out.
Earnings reactions are often dramatic. Apple ((AAPL - Free Report) ) fell roughly 9% following its report, while Microsoft ((MSFT - Free Report) ) rallied about 15%. After moves of that magnitude, investors naturally ask why, and analysts and the financial media typically offer a neat explanation that can be quickly understood.
In Apple’s case, the stock sold off despite a record quarter, with investors focusing on the shortfall in Services, one of the company’s highest-margin and most important growth businesses.
That explanation is not necessarily wrong, but it is incomplete. Stock reactions rarely occur in isolation, and a simple earnings headline can miss the broader forces shaping the move.
The market had already been under pressure for much of the past month as concerns about excessive AI spending weighed on technology stocks. Investors were also awaiting Wednesday’s Federal Reserve meeting amid uncertainty over the path of monetary policy. At the same time, Apple had been the strongest-performing Magnificent Seven stock, partly because it had attracted capital as the one member of the group avoiding a massive AI capital-spending cycle.
So yes, Apple fell partly because of the Services miss. But the decline also coincided with the conclusion of the Fed meeting, greater clarity around interest-rate policy and what may have been a capitulation point in the AI trade. Positioning mattered as well. Investors had crowded into Apple ahead of the report, and even after the selloff, the stock remains solidly higher over the past quarter and year to date.
The broader point is that the market environment can be just as important as the earnings results themselves. During a powerful bull market, investors may overlook a mixed quarter. During a correction, even an excellent report can be sold.
With that context in mind, let’s turn to the results. Meta Platforms ((META - Free Report) ), Microsoft ((MSFT - Free Report) ) and Amazon ((AMZN - Free Report) ) stand out most to me following the earnings reports so far. Nvidia ((NVDA - Free Report) ) has yet to report, but it also remains compelling based on valuation, with its forward earnings multiple near the lower end of its historical range.
Image Source: Zacks Investment Research
Magnificent Seven Earnings ResultsBroadly speaking, the Magnificent Seven stocks look quite attractive to me. Excluding Tesla, valuations are generally reasonable, while revenue and earnings growth are accelerating across much of the group. Capital spending and weakening free cash flow remain the primary overhangs, but the latest results also suggest that these investments are beginning to generate meaningful returns.
Alphabet
Alphabet delivered another excellent quarter. Google Cloud revenue surged 84% year over year, while Search growth accelerated into the mid-teens.
Investors instead focused on the continued rise in capital spending and the fact that free cash flow turned negative for the first time in the company’s history. Those are legitimate concerns, but the valuation provides a considerable margin of safety. At roughly 17 times forward earnings, with EPS expected to grow 17.4% annually and the company exceptionally well positioned for the modern digital economy, Alphabet is difficult to overlook. It currently carries a Zacks Rank #2 (Buy).
Meta Platforms
Meta delivered another strong topline beat, with revenue rising 28% year over year. Once again, however, investors focused on weakening free cash flow as the company directs more capital toward AI infrastructure.
Meta did not increase its capital-spending forecast, though it narrowed the guidance range, and shares fell roughly 8% following the report. The stock is now approaching an important technical support level.
At approximately 18 times forward earnings, Meta looks increasingly compelling. Its core advertising business remains exceptionally strong both with engagement and prices rising, while an emerging cloud business could provide another significant long-term growth engine. Bouncing right at that level of support.
Amazon
Amazon delivered a monster quarter, beating expectations and raising its outlook. AWS, the world’s largest cloud platform, continued to accelerate, posting its fastest growth in 18 quarters and reaching an annualized revenue run rate of approximately $169 billion. Segment operating margin expanded to 39.4% from 32.9%. A year ago AWS was growing in the high teens.
Amazon also disclosed that its AI and semiconductor businesses have each surpassed a $25 billion annualized revenue run rate and are growing at triple-digit rates. Free cash flow turned negative after capital expenditures, but the strength of AWS and these emerging AI businesses should help ease concerns about the company’s spending.
Advertising was another bright spot, with revenue rising 26% year over year. Remarkably, Amazon trades at only about 26.3 times forward earnings, a compelling valuation given the acceleration across its highest-quality businesses.
Microsoft
Microsoft’s post earnings reaction was astonishing, with the stock rising 15% and making a record for the largest market cap appreciation in a single day by any stock ever.
The company beat expectations on both the top and bottom lines, while revenue increased 18%. Azure grew 27%, and other cloud services expanded 43%, further demonstrating the extraordinary strength of cloud and AI demand across the industry.
Microsoft also reported more than 30 million paid Copilot users, up from 20 million one year ago. Microsoft got dragged lower during the software rout, and appears to be rising from the depths. That seems reasonable given these results too.
At roughly 23.2 times forward earnings, the company remains one of the highest-quality businesses in the market.
Tesla
Tesla ((TSLA - Free Report) ) reported a respectable quarter, with revenue finally returning to growth and increasing 25% year over year. However, some of that strength appeared to be supported by discounts and aggressive financing offers intended to reduce inventory.
The major highlight was the Services business, where revenue increased 50% to nearly $5 billion for the quarter. In my view, that segment represents an increasingly important part of Tesla’s long-term future.
Still, Tesla remains the black sheep of the Magnificent Seven. Its valuation is exceptionally high, while growth in its core automotive business remains comparatively modest. The company may ultimately justify the premium through autonomy, robotics and services, but the current risk-reward profile is far less attractive than the rest of the group.
Apple
Apple delivered a strong beat-and-raise quarter, though the stock faded following the report. In my view, the decline was largely a positioning issue.
Apple had already rallied roughly 25% year to date and entered earnings with a market capitalization near $5 trillion. With expectations and positioning elevated, the bar for a positive reaction was unusually high.
Revenue increased 16% year over year, an exceptional growth rate for a company of Apple’s size, while EPS jumped 29%, marking a ninth consecutive quarterly beat. iPhone revenue rose 22%, Mac sales came in well ahead of expectations and every geographic segment posted double-digit growth.
The lone weak spot was Services, which missed estimates. Given that Services is Apple’s highest-margin and most structurally favored business, the shortfall likely provided the immediate catalyst for the selloff.
The larger takeaway is that the criticism that Apple can no longer innovate may be correct in a narrow sense, but it increasingly matters less. Apple remains an extraordinarily well-run organization selling products consumers continue to demand, while occupying one of the most valuable distribution positions in the digital economy.
It was a stellar report, and I view the selloff primarily as the result of elevated expectations and crowded positioning. Apple remains a great company, but at approximately 38 times forward earnings, the stock is richly valued, even if the valuation has not yet reached outright euphoric territory.
Should Investors Buy Shares in Magnificent Seven StocksQuestions about the ultimate return on AI capital spending remain valid, but the latest earnings reports suggest that the Magnificent Seven is at least reasonably well positioned to profit from the investment cycle.
Amazon offered the clearest evidence. AWS growth accelerated sharply, margins expanded and the company’s AI and semiconductor businesses are already generating meaningful revenue at extraordinary growth rates. Microsoft, Alphabet and Meta are at different stages of the same process, but their scale, distribution and control of critical infrastructure give them a credible path to monetizing these investments over time.
The greater burden of proof may ultimately rest with the AI laboratories themselves, including OpenAI, Anthropic and other model developers. These companies must demonstrate that the economics of training and operating increasingly powerful models can support durable margins. The hyperscalers, by contrast, are selling the compute, cloud capacity, data infrastructure and distribution required to power the entire ecosystem.
Cloud computing and data centers may not become the most profitable layer of the AI boom. Competition is intense, capital requirements are enormous and margins could come under pressure as capacity expands. Even so, they should remain a substantial source of profits and an indispensable part of the broader AI economy.
Taken together, the Magnificent Seven still looks remarkably strong. Discernment is necessary, particularly when comparing valuations, capital intensity and the visibility of returns. But the group’s earnings power, competitive advantages and central role in AI suggest that, collectively, these companies should remain capable of carrying the broader market higher.
Nvidia stock NVDA rose on Friday after Amazon reaffirmed its commitment to the chipmaker's artificial intelligence processors and increased its capital spending plans, reinforcing investor confidence in continued demand for AI infrastructure.
The stock gained 2.6% to $199.07 in midday trading, building on Thursday's more than 2% advance.
The rally put Nvidia on track to reclaim its position as the world's most valuable listed company from Apple, whose shares tumbled following its latest earnings report.
Amazon provided another boost to sentiment after raising its full-year capital expenditure forecast to $220 billion from $200 billion, underscoring its continued investment in AI infrastructure.
Chief Executive Andy Jassy also reiterated Amazon Web Services' long-term commitment to Nvidia's processors despite the company's ongoing development of custom AI chips.
"We...continue to have a deep partnership with Nvidia and will continue making AWS the best place to run Nvidia chips, as we have customers who will run on Nvidia for as long as we can foresee," Jassy said during the company's earnings call.
His comments helped ease concerns that Amazon's Trainium processors could rapidly displace Nvidia's products across AWS.
At the same time, Jassy acknowledged that Amazon is exploring additional ways to commercialize its in-house chips.
"We do have an increasing number of customers who are interested in us providing the training and chips to them separate from our cloud," he said.
"We're actively having those conversations and exploring. And I expect there's a real chance we'll do that in the future."
While Amazon continues expanding its custom silicon strategy, its comments suggested Nvidia's graphics processors are expected to remain central to AWS's AI offerings for the foreseeable future.
Friday's gains extended Nvidia's recovery after several weeks of pressure driven by concerns over AI spending, financing arrangements, and rising competition in the semiconductor industry.
Investor sentiment had also weakened following reports that a Chinese company had begun mass-producing key chipmaking equipment, raising questions about the competitive landscape.
Separately, The Wall Street Journal reported that Nvidia is discussing a roughly $250 billion financing guarantee to support OpenAI's lease of a large data centre project in Ohio.
The proposed arrangement would help OpenAI secure more favourable financing while supporting long-term demand for Nvidia's AI processors.
However, the report also prompted concerns among some investors that financing agreements between Nvidia and its customers resemble the circular financing structures seen during the dotcom era.
Investor skepticism over AI valuations has also been highlighted by Michael Burry, the investor best known for predicting the US housing market collapse.
Burry expanded his bearish positions across the semiconductor sector, increasing his put options tied to Nvidia while also adding to short positions linked to Micron Technology, the iShares Semiconductor ETF, and the Invesco QQQ Trust.
In recent posts on X, he has argued that Nvidia's long-term revenue outlook is becoming increasingly dependent on financing arrangements and recently said the company's five-year credit default swaps were going "parabolic" because of what he described as "circular spending to biblical proportions."
Chinese AI startup Moonshot's Kimi models are powered in part by around 20,000 Nvidia Hopper chips supplied through a computing agreement with Alibaba, according to sources. Bloomberg's Peter Elstrom explains what the arrangement reveals about China's AI infrastructure and the role of US technology in training frontier models.
Americké akciové trhy se dnes obchodují v oscilačním módu, když silné výsledky Amazonu a pokračující zájem o téma AI narážejí na jestřábí komentáře představitelů Fedu, růst výnosů a výrazný propad Applu. Amazon posiluje takřka 15 % po nejrychlejším růstu tržeb za více než čtyři roky a navázal tak na pozitivně přijaté výsledky Microsoftu (MSFT +2,72 %) a Alphabetu (GOOG +6,14%), které investorům dodaly větší důvěru, že vysoké investice do umělé inteligence začínají přinášet viditelný efekt. Naopak Apple ztrácí nebývale vysoká % po varování, že růst zasáhnou omezení v dodávkách, a zároveň přetrvávají obavy z dopadu vyšších cen iPhonů. Tržní náladu brzdí nejistota kolem sazeb poté, co Fed tento týden ponechal základní sazbu beze změny, ale několik představitelů centrální banky veřejně podpořilo potřebu dalšího zvýšení sazeb kvůli inflačním rizikům. Makrodatem dnešního dne byl červnový Index spotřebitelské důvěry University of Michigan, ktrerý předčil očekávání.
Z hlediska sektorů dnes nejvíce vyniká zbytná spotřeba, která díky prudkému růstu Amazonu přidává kolem 5 %, zatímco technologický sektor ztrácí přes 1,6 % pod tlakem Applu. Polovodiče se po slabém červenci stabilizují jen částečně; Philadelphia Semiconductor Index je dnes poblíž nuly, ale za celý měsíc ztrácí zhruba 20 %, což by znamenalo nejhorší měsíční pokles od roku 2008. Naopak širší trh mimo největší technologické tituly působí odolněji, když rovnoměrně vážený index S&P 500 míří ke čtvrtému měsíčnímu růstu v řadě. Výnos dvouletého amerického dluhopisu vzrostl o 7 bazických bodů na 4,29 % a desetiletý výnos posílil o 6,35 bodu na 4,727 %, nejvýše od ledna 2025; třicetiletý výnos se dostal na 5,2584 %, tedy nejvýše od poloviny roku 2007. Ropa v červenci výrazně rostla a dnes znovu zdražuje kvůli narušené dopravě přes Hormuzský průliv, zatímco zlato klesá o 1,52 % na 4 040,70 USD za unci.
Z jednotlivých titulů dominuje Amazon, jehož výsledky znovu přitáhly kapitál do AI a cloudového tématu, protože silný růst cloudu zmírnil obavy z vysokých kapitálových výdajů. Microsoft přidává nadále roste po předchozím rekordním jednodenním růstu a výhledu silné tvorby hotovosti do fiskálního roku 2027, roste Alphabet i Meta. V polovodičích posiluje Nvidia (NVDA +2,2 %), zatímco Monolithic Power Systems (MPWR +8,52 %) skáče po výhledu tržeb pro třetí kvartál nad odhady analytiků. Na opačné straně stojí Apple s poklesem o 9,6 % kvůli varování před dopadem dodavatelských omezení a GoDaddy, který propadá o 20 % po zúžení celoročního výhledu tržeb. Výsledky reportoval Exxon (XOM -1,64 %), který navyšuje produkci avšak potíže v Hormuzu výsledky kazí. Mimo USA zaujal jihokorejský KOSPI růstem o 17,91 %, když se prudce odrazil po předchozích ztrátách a stal se symbolem extrémních výkyvů nálady vůči AI a polovodičovým akciím.
Index S&P 500 roste o 0,46 % na 7471,98 b.
Index Dow Jones roste o 0,48 % na 52438,21 b.
Index Nasdaq Composite roste o 0,43 % na 25277 b.
Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Nezbytná spotřeba +5,9 % Základní materiály -2,6 % Sektor komunikací +3,8 % Informační technologie -1,1 % Průmysl +1 % Zdravotní péče -0,5 % Nejsiln ější akcie S&P Změna Nejslabší akcie S&P Změna Amazon.com (AMZN) +15 % GODADDY I (GDDY) -21 % Dexcom (DXCM) +11 % COINBS GBL A O (COIN) -12 % Monolithic Power Systems (MPWR) +9,2 % Corteva (CTVA) -11 % VERTIV HLD A O (VRT) +8,2 % Apple (AAPL) -9,7 % Eaton (ETN) +7,2 % Stryker (SYK) -6,7 % Zdroj: Reuters
