Nvidia (NVDA) reports FY 2026 Q2 earnings after the bell next Wednesday, August 27th, and expectations are sky-high. Positioned at the core of the AI revolution, Nvidia looks set to deliver another round of headline-beating results. With GPU production already fully booked for the next year, its growth trajectory has a firm footing—leaving plenty of room not just to meet but to beat and even raise guidance.
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If Nvidia (NVDA) delivers as it has for the past nine quarters—like a Groundhog Day of upside surprises—investors can expect a positive market reaction, with shares likely to challenge the $200 level by Thursday morning.
Short-term volatility may come from minor details, but the company’s competitive moat shows no cracks. Surging AI workloads from hyperscalers and enterprises continue to power revenue and margins, while forward-adjusted valuations remain compelling. With no meaningful threats to the story in Q2 or Q3, I remain firmly bullish—Nvidia is still a clear Buy ahead of next week’s quarterly earnings results.
Core Expectations for Nvidia’s Q2
As Nvidia’s earnings come into view, the immediate trend is unsurprisingly steady revenue growth. The company is effectively sold out twelve months in advance, meaning the production capacity Nvidia has booked with TSMC (TSM) — its chip manufacturer — determines virtually all of its near-term revenue, so surprises are unlikely.
I expect Q2 results may come in slightly above guidance. Analysts estimate revenue at $45.9 billion, which implies an incredible 53% year-over-year growth. This is roughly flat compared to what analysts predicted six months ago, but about 4% below what was expected for Q2 at the start of the year. Nvidia has been careful in managing expectations, setting guidance conservatively so it can slightly exceed projections without creating volatility.
AI workloads—OpenAI models, Azure, AWS, and Oracle cloud services—remain the main growth driver. Demand for GPUs continues to explode, with top hyperscalers like Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOGL), and Oracle (ORCL) collectively raising CapEx to $365 billion, a 64% year-over-year increase. This is higher than the pre-earnings-season expectation of $325 billion and is fueling unprecedented computation growth.
Given that GPUs carry high margins and Nvidia has pricing power due to scarcity and strong demand, profitability is expected to grow alongside revenue. Q2 EPS is projected at $1.01, a 48% year-over-year increase, slightly above analysts’ projections over the last three months (around 1% higher).
So, broadly speaking, this looks like a potentially untouchable quarter for Nvidia. That said, market reactions could still fluctuate based on minor details—which, of course, may not be insignificant. Given the magnitude of the company and the high level of market scrutiny, an expected earnings move of ~7.3% is priced into options chains, calculated through the at-the-money straddle of options closest to the post-earnings expiration.
I would say this level of implied volatility is relatively high, but not extreme for Nvidia. Historically, expected moves have often been in the 5–10% range, so this falls within the normal-high bracket for the stock.
Where Things Might Go Wrong for Nvidia
Even though there is widespread confidence that Nvidia will once again report a stellar quarter, the devil lies in the details.
In this case, the main risk for Nvidia appears to be China. Nvidia may still beat estimates, but revenue from China should come in lower than historical levels, and margins will consequently be compressed. Beijing has been discouraging local companies from using U.S. chips, especially in government-related applications.
When the Trump administration halted Nvidia’s H20 chip sales to China in April this year, Nvidia lost a sizable chunk of its revenue expectations for the Chinese market, about $8 billion for Q2 alone. To put the relevance of this into perspective, China accounted for about ~13% of Nvidia’s total data center revenue, which is not insignificant, although much more modest than the ~47% from the U.S., for example.
Now, as part of the agreement with the U.S. government, Nvidia can resume selling the H20 to China, but it must deliver 15% of all revenue from these sales directly to the US Treasury. And of course, the trend is toward lower revenues in the region. There is also the issue of stockpiled inventory at play, as before the ban, major Chinese companies had placed approximately $16 billion in orders in Q1 for H20 chips. In other words, this suggests that even if licenses are restored, immediate post-license demand is likely to be weaker because these companies have already fulfilled their AI infrastructure demands.
The big question is how relevant this whole China issue will be in terms of having a significant impact on Nvidia’s ability to beat guidance decisively and, more importantly, raise its Q3 guidance robustly, where any indication of revenues short of $52.5 billion would be below average market estimates.
Nvidia’s Eye-Popping Growth Justifies the Stock
From my perspective, trading at 48x earnings and 40.4x forward earnings, Nvidia stock still looks very attractively priced when you consider its earnings growth potential. The long-term EPS estimate for the next three to five years remains at 29.8%, which puts NVDA at a PEG of just 1.36—roughly in line with its leading semiconductor peer, AMD—and at a discount compared to every other Magnificent 7 peer, except Alphabet, which trades at 1.34.
All things considered, it seems that Nvidia stock appears cheap based on its growth story, not because the market has undervalued it, but because its growth rate is so frenetic for a company at this scale that even seemingly stretched valuations start to look reasonable when weighed against the continuation of its growth trajectory.
What is Nvidia’s Price Target?
The consensus among market analysts is that Nvidia is a Strong Buy: 35 out of 39 ratings are bullish, three are neutral, and only one is bearish. Currently, NVDA’s average stock target price is $197.89, implying a potential upside of just over 13% over the coming year.
Nvidia Poised to Defy Volatility in Upcoming Earnings
The odds are clearly in Nvidia’s favor ahead of its highly anticipated quarterly earnings results. With chip supply effectively sold out for the next year, the growth story remains rock-solid. Minor details—like the ongoing unease regarding China—might cause some short-term volatility, but looking at the bigger picture, I don’t see any Q2 surprises that could structurally threaten Nvidia’s medium- to long-term thesis. With that in mind, Nvidia stock remains a Buy.