Nvidia (NASDAQ:NVDA) stock has built a reputation for consistently shattering quarterly earnings projections – a fact seasoned investors know all too well. But that winning streak can be a double-edged sword, as even a solid beat doesn’t always translate into immediate post-earnings gains.
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That dynamic makes Nvidia’s upcoming fiscal Q2 2026 earnings on August 27 especially intriguing. Momentum is already firmly in the bulls’ corner, with NVDA shares up 91% since hitting a trough in early April.
Expectations remain strong, though not at the triple-digit pace NVDA has delivered in its best quarters. The average analyst estimate of $45.75 billion points to year-over-year growth of 52.31%, with margins expected to hold at an impressive 72%. On paper, such results could still tempt investors to add shares ahead of the report – even if history suggests a short-term lull is possible afterward.
But not everyone is convinced. One top investor, known as Oakoff Investments, is taking a far more cautious stance.
“I don’t like the setup formed in NVDA’s price action as it approaches the Q2 earnings release date,” warns the 5-star investor, who is among the top 4% of TipRanks’ stock pros.
Oakoff’s caution stems largely from concerns about Nvidia’s sales to China. While previous U.S. restrictions appear to have been lifted, there are signs the Chinese government may impose its own limits. That also possibility raises the stakes for Nvidia to deliver outsized growth in other regions to sustain investor enthusiasm – a task Oakoff believes is becoming increasingly difficult.
“If the market gets a slight hint towards further deterioration on this front, the stock may sell off badly even if NVDA beats the headline numbers as strongly as it did during the past 2 years,” Oakoff opined.
Valuation is another sticking point. After months of gains, Oakoff argues the rally has been fueled by multiple expansion, pushing NVDA’s Forward P/E ratio to an “unsustainable” 42.5x. The result, according to Oakoff, is a setup vulnerable to disappointment.
Given these risks, the investor is leaning toward profit-taking before the earnings call. “I maintain a Hold rating, believing NVDA stock’s high valuation and the new China uncertainty outweigh the likelihood of a strong Q2 beat,” Oakoff says. (To watch Oakoff Investments’ track record, click here)
Wall Street, in contrast, remains almost ‘all in’ on NVDA. With 35 Buys, 3 Holds, and a solitary Sell rating, the stock enjoys a Strong Buy consensus rating. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.