‍#英伟达财报周 $NVDA

NVDA Earnings Review: The “Nvidia curse” is broken—focus on these key metrics

Nvidia’s much-anticipated earnings report finally arrived after the U.S. market close early this morning! As expected, results once again significantly exceeded expectations😂; the stock price also “customarily” fell after the results were released. However, surprisingly, the stock price quickly rebounded after touching $204. As of now, NVDA is trading higher after hours at $218.9, driving a broad rebound in the memory sector. SanDisk and SK hynix surged sharply together. Little God of Wealth believes NVDA will continue to fluctuate upward, while SanDisk and its peers will head north after shedding concerns about the “Nvidia curse”.

I. How should Nvidia’s earnings report be interpreted? Keep a close eye on these indicators:

1. Core performance data: For the second quarter ended July 26, revenue was $96.22 billion, beating expectations of $92.17 billion, up 18% quarter over quarter and 106% year over year; adjusted earnings per share were $2.22, beating expectations of $2.10, up 19% quarter over quarter and 120% year over year; GAAP and non-GAAP gross margins for the quarter were both 75.0%. These figures are relatively easy to interpret: revenue beating expectations indicates that the company’s business is developing better than expected and that cash flow is ample; strong earnings per share and gross margins indicate that the company’s profitability remains solid, with technological barriers, product scarcity, and absolute pricing power keeping its profitability at the top of the global semiconductor industry.

2. Third-quarter performance guidance: Revenue is expected to be $108 billion, plus or minus 2%. Nvidia did not include data center computing revenue from China in its outlook. GAAP and non-GAAP gross margins are expected to be 74.0%, plus or minus 50 basis points. GAAP and non-GAAP operating expenses are expected to be approximately $9.2 billion and $9 billion, respectively. Nvidia expects its full-year GAAP and non-GAAP tax rates for fiscal 2027 to be between 16.0% and 18.0%, excluding any special items and significant changes in Nvidia’s tax environment. The biggest highlight here is that this guidance completely excludes data center revenue from China, representing a conservative floor expectation; the subsequent realization of domestic orders will provide additional upside beyond expectations.

3. Fiscal 2028 outlook: Nvidia’s chief financial officer said the company’s revenue will grow by approximately 70% in fiscal 2028, far exceeding the market’s previous estimate of 45%. Nvidia’s CFO expects supply to remain a bottleneck constraining growth at least through fiscal 2028. The core logic is that demand remains strong, with no recessionary pressure; as long as capacity is released, revenue and profit will see stable incremental growth, providing strong fundamental support for the company’s high valuation.

4. Vera Rubin progress: Jensen Huang said that the construction of artificial intelligence infrastructure is advancing at full speed. Vera Rubin is now fully in production, and its construction is intended to meet the demands of this era.

II. Why did the “Nvidia curse” fail to work this time?

1. The market had already priced in the expected decline: As the “Nvidia curse” repeatedly proved accurate over the past year, many investors, like Little God of Wealth, chose to sell their stocks early to avoid risk, causing NVDA to plunge 9% in a single day the day before yesterday. This also invisibly reduced selling pressure on the day the earnings report was released. I also said the day before yesterday that NVDA would not fall much on the day of its earnings release.

2. The earnings report was not merely “better than expected”; the future performance guidance was extremely attractive: The expectation gap completely reversed: not merely meeting targets, but reshaping long-term valuation✅
In the past, better-than-expected results were limited to quarterly revenue and profit, representing “excellence within market expectations” and failing to break through investors’ established expectations. This time, the newly added guidance for 70% revenue growth in fiscal 2028 far exceeded the market’s old expectation of 45%, directly extending the AI upcycle, breaking the bearish consensus that “Nvidia’s growth has peaked,” providing entirely new long-term support for its high valuation, and completely reversing the market logic that “good news being priced in is bad news.”

3. Extremely stable earnings quality has greatly increased valuation tolerance✅
Past earnings reports often contained flaws such as slight gross-margin declines and rising expenses, becoming excuses for investors to take profits. This time, the ultra-high 75% gross margin remained stable, Q3 gross margin was adjusted only slightly, and the tax rate and expense structure were clear and controllable, with no weaknesses in earnings quality. Solid fundamentals combined with better-than-expected long-term growth expectations gave investors no reason to sell on the news, ultimately ending the earnings-related decline curse that had persisted for multiple quarters.

III. How should we proceed from here?

Recently, the “Nvidia curse” had become a sword of Damocles hanging over AI technology stocks. Now that the earnings report has been released, it can be understood to some extent as the “bad news being fully priced in.” Going forward, long positions can be built on dips. As previously analyzed, SNDK is currently undergoing a market reversal after a five-wave decline, so while allocating to Nvidia, investors can also allocate part of their portfolios to more volatile memory-sector names such as SanDisk and Micron:

1. Nvidia market analysis: Before the earnings report was released, Nvidia posted a rare seven-session losing streak, with a short-term cumulative pullback of more than 7.5%, setting its longest losing streak since 2022. Market pessimism and profit-taking had already been fully absorbed. After the earnings report, it staged a typical reversal: after-hours trading initially plunged 3% for a shakeout, then surged straight up on the long-term high-growth guidance from the conference call, rising more than 4.7% at its peak and fully recovering the intraday decline, as short-term bearish pressure was completely cleared. From the daily chart (see Figure 2 below), it is not difficult to see that NVDA is currently in a trading range between 190 and 236. Little God of Wealth believes that, from a long-term perspective, NVDA is highly likely to break upward out of this range. Therefore, long-term positions can be built on dips. For short-term investors, trades can be made around this range by selling at the highs and buying at the lows.

2. My AI technology stock position-building plan:

NVDA

Portfolio allocation: 30%

Entry range: 202-207

Stop-loss level: 190

SNDK

Portfolio allocation: 20%

Entry range: 1450-1500

Stop-loss level: below 1400