NVDA Earnings Could Change Everything ⚠️ | Nvidia Stock Analysis | NVDA Stock | Investing Tutorial

Added: 2026-05-25

[00:00:00]full of earnings happening on Wednesday.

[00:00:01]What is Jensen got to say?

[00:00:04]Well, what Nvidia needs to do is again, obviously the street wants to see strong earnings, but we think he has to raise the outlook even greater than he did last earning season. And for four quarters in a row now, Nvidia has not only beaten raised estimates, it's done so at increasing rates.

[00:00:21]So, last earning season, its overall estimates went up at a rate of about 10 and 1/2%. So, that's our bogey. We want to see Nvidia raised by 10 and 1/2% or more to keep it on an improving path.

[00:00:31]Um and if it only raises by 5% or so, uh that would be the first signs that maybe the expectations have gotten a little too high. So, we fully expect strong earnings. We fully expect a raise. The question is, how much will that raise be?

[00:00:45]Yeah, it's about the magnitude, isn't it? And that's always really the case with Nvidia. But, I mean, they just continue to keep setting such high bars for themselves, I would say. And given everything we've heard from the chip trade so far this earning season, I mean, it's got obviously a lot of tailwinds. So, uh we kind of get a little bit of a hint and some clues about that. What about the tokenomics?

[00:01:03]There's just so much talk of that right now as to the monetization of all this stuff.

[00:01:08]Right. And well, they are they are monetizing it. And like you said, we've seen earnings from Sandisk, Micron, you know, not just the chip plays, but you know, this this AI trade has broadened out to different areas of memory, networking, power infrastructure, data center build-outs, even even companies like Caterpillar had fantastic earnings because they need more machines to build out the data center. So, this has created a boom.

[00:01:32]Um and so, we have no reason to believe Nvidia won't also report great earnings like Broadcom did, like like Intel has, like Micron has. So, that momentum is very strong and behind it. And certainly not signs that we typically see on an earning standpoint that we're at a gap.

[00:01:52]So, given the run-up we've seen in these stocks, I mean, And thinking about names like Intel, AMD as you pointed out.

[00:01:58]Nvidia which has been somewhat as people say a catch-up trade leading into this earnings. But if you take a look at the SOX, I mean this has been on a record run. I see it what up 11 1,000 and a half or so.

[00:02:10]You know, I mean just in the last few weeks it's it's it's it's climbed quite significantly. As far as a catalyst on Wednesday, do you think uh this gives the chip trade another injection, another reason to go higher?

[00:02:26]Well, Nvidia is one of the last few and Broadcom that will be reporting April quarter ends. Uh then we won't hear from majority of companies again till July.

[00:02:35]So, this could give it that boost that takes us into June because the amount of companies reporting in June decline with the exception of Micron. Micron will report in June. So, it needs to get this shot, this boost to show that the earnings momentum still is intact for companies that are going to be reporting April quarters such as Nvidia uh to extend this into the summer and into the fall. So, yeah, we need that boost from Nvidia since it's the bellwether and the biggest company in Are we overstretched here in terms of this AI tech trade and just how far it's run, how quickly?

[00:03:05]Look, that's why it's so important in terms of Nvidia earnings because I think that's going to put just more fuel in this tech rally. You know, we think tech stocks are up another 10, 12% rest of the year. Look, we're going to have some of these white-knuckle moments, you know, whether it's Iran, whether it's rate special wars coming in, but it just continues to be the risk-on trade because this fourth industrial revolution, like we said, it's top of the third inning, one out, and that's where we are. And I think you're going to continue to see these dips get bought. Why do you say especially with wars coming in? Because I think there's just worries, you know, him coming in, what does it mean for tightening, you know, worries about rates. If you look at just like when anytime a chairman comes in, what the stocks do over the next 3 to 6 months. So, there's definitely nervousness. The bears will come a little out of hibernation mode, and you'll and you'll see them scare some of bulls. But the reality is is that we are still early in this trade in terms of AI. We'll hear from Godfather of AI this week and that's going to be just another important data point in what we see as this plays out.

[00:04:04]>> the best nicknames for all these different companies and CEOs.

[00:04:07]Um Vance, want to get your thoughts on this, especially given the fact that if you do look at some of the technicals, um we are looking at least within the equity markets with oil higher, with rates having this big run up overstretched.

[00:04:19]Uh well, it it is in the short term, but I agree agree with Dan. You know, I think it's sort of a white-knuckle moment where it kind of gives you a little bit of pause, but you know, just just move your stops up a little bit. I think you need to be a little bit nimble. But I think Dan's spot-on. I think the market's going to go higher. I think I think he's right that, you know, the tech trade is still very much alive and I think any pullback is buyable. You know, you know, our target was 77, 7,800 on the S&P. It looks like we're going to get there by midsummer. And um you know, 8,000 is is in the sights. Mm. Um how would you be playing the tech trade right now, Vance?

[00:04:50]Uh I would be nimble, but I would be long tech. I'd I'm very bullish on it and I I can't see tech go You know, I think we're going to get a pullback here maybe 3 to 5% which would actually be a gift. It would give us a chance to add to some positions that we like, put some capital to to work that maybe we've sit we've been sitting on cash just a a small amount and I think it's be a good chance to take the opportunity to buy some great great equities. Mm. I do want to dig a little more deeply. Oh, go ahead. You looks like you're ready to go here.

[00:05:14]>> I just I think Vance makes phenomenal points in terms of these dips get bought. Look, we saw in March.

[00:05:21]Yeah. Cap. Um speaking of Nvidia, wow, talk about a breakout ahead of these results. I mean, expectation that you're going to see revenue reaccelerate here in their new fiscal year um and perhaps even coming stronger than that for Q1.

[00:05:33]How do you see it? The black leather jacket's getting ready for Wednesday because I I think the street numbers still are underestimated. We think anywhere from 15 to 20% over the next few years because everything we've seen from our checks in Asia from Taiwan show demand supply 10 to 1 for Nvidia chips.

[00:05:51]You've seen it from AMD, TSMC, just go across sort of the food chain and I think this is really going to be another breakout moment relative to the AI trade. I think investors are still, especially when it comes to physical AI, they might have the China trade. You know, when you think about H200s, that's not factored in. And look, if the Godfather of AI speaks, you'll hear a pin drop on trading floors because that is the most important thing in this market. For Nvidia investors, the first move after earnings has always been only part of the tail.

[00:06:21]Buying the stock just before the quarterly reports produced minor short-term returns, but the long-term outlook was significantly more positive.

[00:06:29]This chart clearly displays the difference.

[00:06:31]Since 2016, Nvidia's post-earnings returns have been positive for all holding periods evaluated.

[00:06:38]However, the advantage has been significantly more small in the coming day, week, or month than in a quarter or year.

[00:06:45]The median growth was only 0.3% after 1 day, 3.3% after a week, and 0.4% after a month.

[00:06:54]This increases to 11.1% over a quarter and 87.6% over a year.

[00:07:00]This helps to frame the challenges that traders will face in the upcoming report.

[00:07:05]Options are pricing in a 6% post-earnings swing, far exceeding Nvidia's average daily range during the previous quarter.

[00:07:13]However, it is also near to what the stock has previously demonstrated it can do in terms of earnings based on its most recent configuration.

[00:07:22]Earnings volatility at Nvidia is real and part of the stock's strategy.

[00:07:26]The challenge for short-term traders is that even when Nvidia provides the desired large swing, the initial reaction is unexpected.

[00:07:34]The lengthier holding times become more noticeable at this point.

[00:07:37]Similar to median returns, historical win rates, or the proportion of the time performance is positive improve significantly as the time frame extends.

[00:07:47]Nvidia has performed better 55% of the time after 1 day, 60% after 1 week, and 53% after 1 month.

[00:07:56]These odds increase to 78% after a quarter and 84% after a year.

[00:08:01]In other words, waiting has tended to be at least as important as prediction.

[00:08:06]The longer-term graphic, which dates back to the turn of the century, includes one key caveat.

[00:08:12]It measures the rolling 10-quarter average over 2.5 years of Nvidia's 1-year post-earnings returns, which have moved in predictable cycles over time.

[00:08:23]Nvidia's 1-year post-earnings payoff has declined from its peak during the AI boom.

[00:08:29]That rolling measure rose past 150% and is now at 70% Nonetheless, the overall trend remains consistent.

[00:08:38]Historically, investors who gave the transaction time to work have had the best post-earnings performance.

[00:08:45]Nvidia reported $215.93 billion in sales for the fiscal year 2026, which concluded on January 25th, increasing 65% from the previous year.

[00:08:58]The company's gross margin is an amazing 71.1% with a net income of $120.06 billion for the year.

[00:09:07]Earnings per share were $4.90 up 67% from the fiscal year 2025.

[00:09:14]Nvidia anticipated $78 billion in first quarter sales for FY 2027, a 76.8% increase over the previous year.

[00:09:23]So, in other words, the money will keep coming in.

[00:09:27]Analysts expect Nvidia will perform even better with revenue of $79.17 billion up 79.6% year-on-year.

[00:09:37]And it's all the more impressive given that Nvidia is still effectively barred from making sales in China.

[00:09:43]China was a significant buyer for Nvidia GPUs, accounting for $17.1 billion in sales as recently as 2024.

[00:09:51]Nvidia offered the H20 chip, a reduced version of their Hopper H100 CPU, to China until April 2025, when new export restrictions prevented shipments.

[00:10:02]Since then, Washington and Beijing have gone back and forth on Nvidia's chips.

[00:10:06]CEO Jensen Huang indicated last year that Nvidia will begin sales, with 15% of the proceeds going to the US Treasury, but the sales never happened.

[00:10:15]The Commerce Department has approved Nvidia's sales of sophisticated H200 processors to 10 Chinese companies.

[00:10:23]However, despite Huang accompanying President Donald Trump and other executives to Beijing for 2 days of trade negotiations, Beijing continues to restrict the sales as Chinese officials encourage enterprises in the nation to utilize domestic alternatives.

[00:10:37]Nvidia generates the vast bulk of its revenue from data center sales.

[00:10:42]In the fourth quarter of fiscal 2026, data center revenue totaled $62.3 billion, accounting for about 91% of Nvidia's total revenue.

[00:10:54]The nation's largest hyperscalers, Amazon, Alphabet, Meta Platforms, and Microsoft, stunned Wall Street in February when they disclosed intentions to spend up to $700 billion this year alone on capital expenditures to build out their AI platforms.

[00:11:11]As a result, there was legitimate concern in recent weeks when those corporations announced quarterly earnings that capital expenditures would slow.

[00:11:20]The reverse occurred, however.

[00:11:22]Analysts at BNP Paribas stated that leading AI hyperscalers had boosted their guidance following first quarter earnings, expecting to spend $725 billion on CapEx, nearly doubling the rate of investment from mid-2025.

[00:11:38]That level of spending makes Nvidia's most optimistic estimates appear plausible.

[00:11:42]Huang stated during the Nvidia GTC 2026 conference that Nvidia might generate up to $1 trillion in revenue by the 2027 calendar year.

[00:11:52]Furthermore, Nvidia continues to seek out new partners and capitalize on its current momentum.

[00:11:58]Its most recent announcement is a collaboration with Iran to invest up to $2.1 billion in the company, including up to 30 million shares of Iran stock as Iran purchases Nvidia AI infrastructure to support up to 5 gigawatts of computing capacity.

[00:12:13]Analysts predict Nvidia will announce EPS of $1.78 on May 20th, up from $0.81 last year.

[00:12:22]I expect another earnings beat and good outlook as hyperscalers rely more on Nvidia chips.

[00:12:27]Nvidia stock is now trading 5% behind its all-time high, but I expect it will hit multiple new highs in the next weeks.

[00:12:35]Nvidia remains a solid investment.

[00:12:37]Nvidia is the operating system for the AI economy.

[00:12:41]It just ended fiscal 2026 with $215.94 billion in revenue and $120.07 billion in net income, which would have seemed ludicrous 2 years ago.

[00:12:54]Shares are up 18.83% year-to-date to $224.41, although the price is cheap in relation to cash flow.

[00:13:04]Can Nvidia hit $400 per share by 2030?

[00:13:07]What's holding Nvidia back right now?

[00:13:10]Despite the year-to-date increase, Nvidia trades below its 52-week high of $236.54, and the 2.26% 1-week and 11.27% 1-month moves are choppy.

[00:13:24]A beta of 2.244 suggests that all macro tremors are intensified.

[00:13:29]China has the biggest overhang.

[00:13:31]Management's Q1 FY27 sales guidance of $78 billion specifically excludes China data center computing. And Jensen Huang noted that the $50 billion China market is effectively closed to US industry.

[00:13:47]When you combine adverse sentiment surrounding Supermicro export control violations and AI bubble speculation, you have a stock that is paused for breath.

[00:13:57]The street is positioned constructively, but not boldly.

[00:14:00]10 strong buys, 48 buys, two holds, and one sell support a $272.94 consensus price goal.

[00:14:09]This suggests a pedestrian gain from here.

[00:14:12]My response, analysts base their projections on current EPS and predict numerous compressions.

[00:14:18]They underestimate the longevity of the AI capex cycle.

[00:14:22]On the call, Huang stated unequivocally that AI scaling principles continue to apply not only to training, but also to inference, which necessitates huge-scale compute.

[00:14:33]With Blackwell accounting for 70% of data center compute sales with Vera Rubin ahead, the profitability growth runway goes far beyond 2027.

[00:14:42]To get from $224.41 to $400, you'll need to gain 78.2% over about 4 years.

[00:14:49]That is a high single-digit yearly return, which is not surprising for a company that just increased its value by 1,501% in 5 years.

[00:14:59]With a forward EPS of around $8.46, a $400 stock suggests an ahead PE ratio of 47x.

[00:15:08]The current forward PE is 27x.

[00:15:11]Therefore, the aim requires either 21x of multiple expansion or a nearly flat multiple with EPS doubling.

[00:15:19]In Q4, data center revenue increased by 75% year-on-year, while data center networking increased by 263%.

[00:15:29]The PEG is 0.683, indicating underpriced growth.

[00:15:35]Bullish catalysts include a 12x volume increase in the QRPH ETF, Yum Brands integrating Nvidia AI across 500 restaurants, and Huang's belief that Blackwell sales are skyrocketing and cloud GPUs are sold out.

[00:15:51]The major risk is a hyperscaler capex air pocket if AI ROI fails to meet expectations.

[00:15:58]Nvidia's current stock price in relation to its earnings power.

[00:16:02]At 27x projected earnings versus 95.6% quarterly EPS growth, Nvidia does not appear to be costly.

[00:16:11]Shares are trading between the $129.13 52-week low and $236.54 high, closer to the upper end, but not stretched.

[00:16:23]The 10-year return of 20,602% demonstrates what compounding looks like when a company capitalizes on a generational platform transition.

[00:16:34]Operating margins increased from 16% in FY 2023 to about 60% in FY 2026.

[00:16:42]That's the engine.

[00:16:43]Is $400 realistic?

[00:16:46]Here's my opinion.

[00:16:47]$400 by 2030 indicates a 78.2% increase from here.

[00:16:53]I believe it is doable, but not certain.

[00:16:56]Three things must go right.

[00:16:58]Blackwell and Vera Rubin must maintain the data center growth rate. Sovereign and enterprise AI deployments must scale on the 100 AI factories that are already in operation. And margins must remain in the mid-70s.

[00:17:12]A protracted US-China separation that extends beyond H20 would derail it.

[00:17:17]We've laid out a plan for how Nvidia may hit $400 by 2030.

[00:17:22]Don't forget to share your thoughts and experiences in the comments below.

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