NVIDIA Earnings in 5 Days: Should You Buy, Hold, or Sell NVDA?

NVIDIA Corporation’s NVDA much-awaited fiscal 2027 second-quarter earnings (ended July 26) are set to be reported after the closing bell on Aug. 26.  

The results come at a critical juncture for the Jensen Huang-led company, as investors weigh concerns over a possible slowdown in artificial intelligence (AI) spending, ongoing export restrictions on the sale of advanced chips to China, and stiff competition from rivals such as Advanced Micro Devices, Inc. AMD.  

Therefore, as the earnings date approaches, investors should carefully consider their strategy and assess whether to buy, hold, or sell the NVDA stock.  So, what should be their course of action ahead of the earnings report? Let’s take a closer look –   

NVIDIA Poised for Another Blowout Quarter: What to Expect 

In the fiscal first quarter of 2027, NVIDIA reported revenues of $81.6 billion, up 85% year over year and 20% sequentially, according to the company’s May 20 press release. Data Center revenues in particular reached a record $75.2 billion, up 92% year over year and 21% quarter over quarter. 

The robust demand for NVIDIA’s cutting-edge AI chips and computing platforms fueled strong top-line growth in the fiscal first quarter and is expected to remain a key growth catalyst in the fiscal second quarter. The Data Center business continues to benefit as major cloud providers ramp up capital spending on AI infrastructure and expand their deployment of NVIDIA’s graphics processing units (GPUs).  

Against this backdrop, NVIDIA expects revenues for the fiscal second quarter to reach $91 billion, plus or minus 2%, broadly in line with the Zacks Consensus Estimate of $91.8 billion. The revenue outlook reflects continued strong AI demand.  

Furthermore, NVIDIA’s management expects the company to maintain strong profitability along with revenue growth. In the fiscal second quarter, NVIDIA projects a non-GAAP gross margin of 75%, plus or minus 0.5%, broadly in line with the 75% margin reported in the fiscal first quarter. 

Additionally, the Zacks Consensus Estimate for NVIDIA’s fiscal second-quarter earnings per share (EPS) is $2.09, representing a 99.1% year-over-year increase. NVIDIA’s trailing four-quarter earnings surprise, on average, is a positive 5.5%, suggesting that the stock has a track record of surpassing consensus estimates.

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NVIDIA Stock Ahead of Q2 Earnings: Buy, Hold or Sell? 

Strong AI demand, robust revenue outlook, and sustained gross margin point to a strong fiscal second quarter for NVIDIA, with EPS growth projected to be almost double year over year.  

Most importantly, the company’s striking revenue growth projection excludes Chinese Data Center compute revenue, underscoring management’s confidence in achieving strong growth despite ongoing export restrictions.  

Thus, the company’s underlying strength reinforces the long-term investment case for NVIDIA, even if the stock faces short-term volatility following the earnings report. In fact, NVIDIA’s strong fundamentals and AI momentum could make any potential near-term pullbacks an attractive entry point for long-term investors. 

From a valuation perspective, NVIDIA also appears attractive with its forward price-to-earnings ratio of 23.86 sitting below the Semiconductor - General industry’s average of 28.06.

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For now, NVIDIA has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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