Nvidia earnings face a frustrating reality
This digest was compiled by AI from multiple sources — links to the originals are below.
Nvidia reports earnings Wednesday evening, facing a market that has sold off the stock after six of the past eight reports. Strong results have not prevented declines, including the last four quarters. Analysts see a path to $15+ EPS in 2027E and $20 in 2028E, even as the stock has outperformed the S&P 500 by five percentage points over the past month.
Key Facts
- Nvidia stock has fallen in response to earnings in six of the past eight quarters, including the last four, according to Yahoo Finance AlphaSpace analysis.
- UBS analyst Tim Arcuri expects investors to gain confidence in a path to $15+ EPS in 2027E and $20 in 2028E.
- Nvidia stock has outperformed the S&P 500 by five percentage points over the past month, per Yahoo Finance AlphaSpace data.
- HSBC analyst Frank Lee says the next major re-rating for Nvidia will be driven by a new narrative, potentially its positioning as the world's largest contributor to open-source AI.
- Open-source models now represent the second most popular category by token generation, according to Nvidia, as cited by HSBC analyst Frank Lee.
Earnings Reaction Pattern
Nvidia stock has fallen in response to earnings in six of the past eight quarters, including the last four, according to Yahoo Finance AlphaSpace analysis. The market is positioned for the company to post something great and for CEO Jensen Huang to sound super bullish on the earnings call. Nvidia stock has outperformed the S&P 500 by five percentage points over the past month, per Yahoo Finance AlphaSpace data. Expectations on the Street are running hot into earnings, and that has not turned out too well in the last few quarters.
Analyst Outlook
UBS analyst Tim Arcuri said in a note that the numbers are more important than the narrative and expects investors to gain greater confidence in a path to $15+ EPS in 2027E and $20 in 2028E. HSBC analyst Frank Lee wrote that the next major re-rating for Nvidia will be driven by a new narrative as earnings and the product roadmap have become less meaningful narratives for re-rating. Lee contended that this new narrative could be the company's positioning itself as the world's largest contributor to open-source AI. According to Nvidia, the aggregate of open-source models now represents the second most popular category by token generation, Lee said. A boost in small language models presents significant earnings upside by lowering the barrier to entry for enterprise inference, expanding the total addressable market for Nvidia's infrastructure beyond just a few frontier labs to millions of individual developers and sovereign nations, Lee added.
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Nvidia earnings face a frustrating reality
