‍#Gate股票观点挑战 $NVDA

Looking to the past to understand the present: how will the market move before and after Nvidia’s earnings report?

This Wednesday is destined to be a sleepless night for the retail investors trading U.S. stocks. Nvidia, the AI leader, will release its second-quarter earnings report alongside the U.S. Q2 GDP data, and the market is bound to see another fierce battle. Today, instead of guessing the market’s direction, we will “cling to historical patterns” by examining Nvidia’s stock performance after past earnings releases and combining that with current market expectations for Nvidia’s earnings to rationally assess the potential trajectory of AI stocks and how to position accordingly:

I. First, how will Nvidia’s upcoming earnings report look? Which indicators deserve attention?

Let’s start with the conclusion: Based on the current Wall Street consensus, the GPU supply-demand landscape, the performance of individual business segments, and capital pricing logic, Nvidia is likely to maintain extremely high, potentially doubling-level growth this quarter. Core results will most likely slightly exceed market expectations, the data center business will continue to lead, and gross margins will remain high. However, the stock faces the risk of volatility from “selling the news” after the earnings report.

Specifically:

1. In terms of overall core earnings expectations, Nvidia is set to deliver historically impressive growth this quarter, with growth continuing to accelerate from the previous period. Current market consensus estimates compiled by institutions including Bloomberg and S&P show that Nvidia’s second-quarter total revenue is expected to come in at $91.7-$92.2 billion, representing a year-on-year increase of as much as 96%, with quarter-on-quarter growth accelerating further and no sign of momentum slowing. Adjusted earnings per share (EPS) are expected to be $2.09, while net profit is also expected to maintain double-digit year-on-year growth, with profitability continuing to lead global technology companies. Looking at Nvidia’s earnings performance in recent years, consistently exceeding expectations has become the norm. Combined with the ongoing tight supply-demand conditions for high-end AI GPUs, it is highly likely that the three core indicators—revenue, net profit, and EPS—will slightly exceed expectations this quarter. A fundamental negative surprise is unlikely.

2. In terms of earnings quality, the company’s high-margin profit model continues to solidify, keeping profitability at the top of the industry. Relying on its dominant position in the high-end AI chip market and its advantages in large-scale shipments, Nvidia’s overall gross margin is expected to remain above 73% this quarter, while the data center business’s gross margin will be far above the overall average. There are currently no competitors in the industry capable of replacing its high-end computing chips, giving Nvidia full control over product pricing. Combined with lower costs from scaled production, the company’s high-gross-margin, high-net-profit structure is unlikely to change, and its earnings resilience is extremely strong.

3. Compared with the certain strength of its earnings, the biggest focus and key variable in this report lie in the third-quarter guidance and the battle with market sentiment. On the one hand, institutions are broadly optimistic that Nvidia’s third-quarter performance will remain strong, with consensus revenue expectations of approximately $53.46 billion. The upper end of the company’s previous potential guidance range was even higher, and this expectation does not yet include incremental H20 chip sales in the Chinese market, leaving room for future guidance to be raised. On the other hand, short-term capital sentiment contains hidden risks. Nvidia’s stock has risen by more than 12% cumulatively since August, meaning the market has already fully priced in the benefits of high AI growth. Even if the earnings report exceeds expectations, a short-term pullback caused by “the good news being fully priced in” could easily occur. Major institutions including Goldman Sachs have also explicitly warned that strong earnings may not necessarily drive continued stock gains, as valuation digestion pressure is gradually emerging.

To summarize, based on Nvidia’s past earnings performance, it is highly likely that second-quarter revenue, net profit, and EPS will slightly exceed market expectations. However, since the market already anticipates this, it is unlikely to constitute a material positive catalyst. Pay close attention to the following indicators:

1. Gross margin: This is the core figure in the entire earnings report. The market currently expects overall Q2 gross margin to remain around 75%, supported by the strength of the data center business.

2. Third-quarter guidance: After the lesson from SanDisk, pay attention to the possibility of a stock plunge caused by earnings that exceed expectations but weak future guidance. On August 6, SanDisk released its second-quarter earnings report, with revenue and net profit far exceeding market expectations—an explosive performance. However, for the first quarter of fiscal 2027, SanDisk expects revenue of $10.3-$10.8 billion, with a midpoint of approximately $10.55 billion, below analysts’ expectation of $11.16 billion. Non-GAAP diluted EPS is expected to be $44-$46, with a midpoint of $45, slightly below the market expectation of $45.58, prompting the market to vote with its feet and sending the stock down more than 7% in a single day.

3. Projected future spending: AI industry earnings reports have genuinely become difficult recently. Cutting spending invites criticism that development plans are unclear, while increasing spending leads to accusations that returns on investment are too low. Regardless, we must adapt to the market. The market generally expects Q2 capital expenditures of approximately $5 billion, flat with Q1. Q3 capital expenditures are expected to rise steadily to $5.2-$5.5 billion quarter on quarter. If the final figure exceeds this range by too much, investors should guard against a sharp decline.

II. Learning from history: Nvidia’s stock performance after earnings releases over the past year

Over the past four quarters, Nvidia has delivered top-tier earnings reports featuring double-digit growth, record-high gross margins, and robust orders. Its fundamentals have never disappointed, yet the stock declined for two consecutive sessions after each of the four reports, creating what the market widely recognizes as the “Nvidia earnings curse”:

Fiscal 2026 Q2 (August 2025, the summer earnings season) was highly similar to the current Q2, with weak summer liquidity and funds bidding up AI growth expectations ahead of the earnings report. Nvidia’s revenue, data center business, and gross margin all exceeded Wall Street expectations, with no flaws in its growth story. Nevertheless, the stock edged lower the day after the report, falling 4.09% over two trading sessions. The weak performance during that summer earnings season established the basic pattern of “good news landing, followed by a pullback” ahead of third-quarter earnings every year.

Fiscal 2026 Q3 (November 2025) saw global demand for AI computing power continue to surge, while the company’s orders and production capacity continued to exceed market expectations and earnings reached new highs. However, after-hours trading showed a typical “pulse reversal”: the stock briefly surged after hours, attracting momentum-chasing funds, before plunging rapidly. It then officially closed lower the next day, falling 4.10% over two trading sessions. This round marked a complete shift in the market’s trading logic. Funds stopped blindly chasing positive earnings news and began trading in advance on marginal changes in growth rates against a high base.

Fiscal 2026 Q4 (February 2026) saw the largest post-earnings adjustment of the past year. Performance still maintained double-digit-level high growth, but the market began to focus on concerns including slowing growth against a high base, insufficient valuation appeal, and uncertainty surrounding the pace of AI capital expenditures. The stock plunged more than 5% the day after the report and fell nearly 10% over two sessions, marking the largest recent post-earnings decline. This drop was driven entirely by sentiment and valuation digestion and had nothing to do with the period’s operating fundamentals.

Fiscal 2027 Q1 (May 2026) saw Nvidia once again set new records for revenue and earnings with results that exceeded expectations across the board. The data center business rose sharply quarter on quarter, while visibility into production capacity and orders continued to improve. Even as the fundamentals strengthened further, the stock still followed a standard “sell-the-news” pattern after earnings, falling 1.77% the next day and retreating 3.64% over two sessions, extending the established post-earnings pullback pattern.

Over a longer period, Nvidia declined within five trading days after seven of its past 12 earnings reports. Of its past eight reports, the stock rose only twice. The weak post-earnings performance is not a short-term coincidence but a long-established trading pattern. Nvidia’s core trading characteristic has long shifted from “earnings-driven gains” to “expectations being priced in early, followed by profit-taking when the results arrive.” The stock’s entire major upward trend occurs during the pre-earnings buildup, not after the report is released.

III. Considering Nvidia’s recent performance, how should we operate before and after this earnings report?

Looking ahead to the earnings report, Nvidia is highly likely to exceed expectations this time. The issue is that the market is already psychologically prepared for this, which can be described as “trading the expectation.” Whether the market will then enter a “sell-the-fact” phase is therefore worth examining. Moreover, with the market broadly expecting the Q2 earnings report to significantly exceed expectations, if the report falls short—or only slightly exceeds expectations and fails to meet investors’ psychological targets—the stock could still plunge. This creates an awkward situation: if earnings exceed expectations, the public is already prepared and the stock will not rise; if earnings fall short, the stock will definitely fall!

Looking at historical patterns, the curse of Nvidia falling after earnings over the past year has yet to be broken. Xiaocaishen is not the only one clinging to historical patterns in the market. When historical patterns repeat again and again, they become a consensus embedded in investors’ subconscious. Therefore, after this earnings report is released, Wall Street is very likely to once again “ignore the good news and fall first.”

Looking at recent performance, Nvidia followed the Nasdaq lower yesterday, plunging 3% in a single day. Xiaocaishen believes there are two reasons: first, U.S. stock investment styles have recently shifted, with AI technology stocks continuing to correct while blue-chip sectors such as healthcare and financials attract more capital; second, fear of the “Nvidia earnings curse” has prompted some investors to exit early to avoid risk, causing the stock to fall ahead of the report. Thus, some of the expected decline may already have been brought forward. Will the stock therefore fall less after the earnings report is actually released? This is worth watching.

In summary, Nvidia falling again after releasing its earnings report tomorrow is highly likely. Investors are advised to manage risk in advance by reducing positions or using short positions to hedge. However, given that Nvidia is estimated to have already undergone a significant pullback overnight, pricing in some of tomorrow’s expected decline, it remains uncertain how much further the stock can fall after the earnings release. If the stock declines after the report, investors can consider opening an initial position to buy the dip near support at around 197, with a stop-loss below 190. What do you think of Nvidia? Answer with one word in the comments: “up” or “down”? Wishing everyone wealth every day!