Nvidia Q2 Earnings Preview: Growth outlook, AI Investment, and geopolitics in focus

Nvidia is set to release its fiscal Q2 2026 earnings after market close on August 27, with expectations typically high.

Solid Q2 growth forecast, outlook will drive stock performance

Analysts are anticipating adjusted EPS of $1.009, up modestly from the prior quarter but still 50% higher than the previous corresponding period. Revenue is forecast at $46.1 billion, growth of 53%, while adjusted net income is expected to climb at the same rate, at approximately to $24.86 billion.

Consensus suggests that headline numbers will come in line or modestly ahead, buoyed by strong GB200 and GB300 deployments, robust demand for AI infrastructure, and growth from sovereign and cloud customers. However, investor attention is likely to shift quickly toward Nvidia’s guidance and commentary on future growth drivers. Commentary on the ramp-up of the GB300 chip and the inclusion of China shipments—currently minimal but expected to accelerate into Q4—will be pivotal in shaping expectations for H2.

Nvidia’s guidance for Q3 will likely remain upbeat, even as management exercises caution around supply-chain risk and export restrictions that could increase costs. Gross margins are tracking in the mid-70% range, aided by improving Blackwell yields and Nvidia’s focus on high-value sovereign AI and hyperscaler clients. If confirmed, this would solidify the view that Nvidia’s is well supported and remains positioned to benefit from a secular AI trend.

Nvidia’s results transcend fundamentals with AI trade, geopolitics in focus

Nvidia’s earnings transcends just the company’s fundamentals, with investors looking for signals about trends in AI demand and global geopolitics. One of the most closely watched issues is the status of Nvidia’s H20 chip, which has become a barometer for US-China tech tensions.

Approval for Nvidia to resume H20 exports to China presents a possible near-term tailwind. However, China has subsequently advised its companies to avoid these chips, risking revenues in the country and market share. In addition, Nvidia’s commitment to hand over 15% of all revenues generated from China to the US government crimp the businesses bottom line.  Nevertheless, shipments into China are expected to pick up meaningfully in Q4, and Nvidia’s commentary around customer readiness and demand visibility will be vital.

More broadly, investors are still grappling with the durability of the AI boom—and the extent to which a narrow customer base could be overinvesting in infrastructure. Nvidia’s success depends not just on demand for chips, but also on the software and networking stack that supports large-scale AI training by hyperscalers as well sovereign clients and smaller cloud adopters.

Analyst sentiment remains bullish amid record-breaking run>

Nvidia stock has been one of the standout performers of 2025, rising over 43% year-to-date and briefly touching a record high of $184.48 on August 12. The current market cap sits just over $4 trillion, making Nvidia one of the most valuable companies on the planet.

Analyst sentiment remains overwhelmingly positive. As of August 25, 88% of analysts rate the stock a “Buy”, with just one “Sell” among the 87 ratings tracked. The average 12-month price target stands at $194.49, implying roughly 9% upside from current levels. 

Valuation remains a focal point for investors. The stock trades at 40x forward earnings and nearly 30x forward sales, reflecting a high degree of optimism about the company’s outlook. As a result, an earnings misstep could spark volatility and a pull back in the stock price.

Nvidia stock remains in uptrend but momentum slows

Nvidia’s shares remain in a clear uptrend, although upside momentum is slowing down. The stock has broken short-term upward sloping support with the weekly RSI falling below overbought levels. A break below $168 could cause a deeper pull back towards former resistance (and now support) at the stock’s previous record highs in the low $150 level. 

In the bigger picture, upward sloping trendline support around $105 represents a critical level and possible deep value. Meanwhile, a break to new record highs would confirm Nvidia’s continued uptrend. 

(Source: Trading View)
(Past performance is not a reliable indicator of future results)