Key Insights
- Nvidia stock held steady above the key resistance level of $213.
- The company will publish its financial results next week.
- These earnings are expected to show that its revenue jumped in Q2.
Nvidia stock will be in the spotlight in the coming days. Investors have started positioning for its financial results that come out on August 26. These earnings will likely determine whether the stock continues its strong uptrend or whether it retreats.
Nvidia Earnings Preview
There are signs that Nvidia’s earnings will show that its business continued to do well in the second quarter of this year. One of these signs is that all its top suppliers have published strong financial results in the past few weeks. The names include companies like Taiwan Semiconductor, SK Hynix, and Micron.
At the same time, all its top clients released strong numbers and maintained their strong forward capital expenditure guidance. That includes hyperscalers like Microsoft, Amazon, and Meta Platforms. Its smaller clients like CoreWeave and Nebius did the same.
In its last earnings report, Nvidia projected second-quarter revenue of $90 billion. Yahoo Finance data shows that analysts expect its revenue to come in at $91.96 billion, up by 96% YoY.
Historically, Nvidia has beaten analysts’ estimates, meaning its actual figure will likely be higher than the estimates.
A 96% quarterly revenue growth is really encouraging, especially for a company that has been in business for decades. It normally sends a sign that the company is highly dynamic and is changing with time.
These numbers come at a time when competition in the GPU industry is rising, with companies like AMD and Google gaining market share. Google’s TPU has already received major customers like Anthropic and Apple. Amazon’s Graviton chips are making an annual revenue run rate of $25 billion.
Nvidia is Taking Measures to Beat Competition
Nvidia is aware of the rising competition and is taking measures to protect its business. For example, it has made some major investments in its biggest customers like OpenAI, Anthropic, CoreWeave, and Nebius. Its investments in these companies usually come with conditions that they will use its chips.
Nvidia announced partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilize more than $500 billion in third-party capital for AI infrastructure development.
Additionally, the company has moved to expand its business, especially by launching its line of CPUs. Its GPUs are useful in training large AI models. CPUs, on the other hand, are important in the fast-growing AI agent business.
The company is also working on the next-generation chips after Blackwell. The company is currently developing the Rubin chip, which will be succeeded by the Feynman chip. These chips will have more capabilities.
Meanwhile, there are signs that the company is highly undervalued. Despite its strong revenue and profitability growth, the company has a forward price-to-earnings ratio of 21.
That’s much lower than its historical level. As a result, the company may decide to accelerate its share repurchases when it releases its earnings.
Nvidia Stock Price Technical Analysis
Technicals are highly supportive of the NVDA stock price. It formed a double-bottom pattern at $189 and a neckline at $213. Nvidia stock has already moved above the neckline and the 50-day moving average.
The Relative Strength Index (RSI) has jumped above the neutral level of 50. It’s a sign that the uptrend is gaining momentum. Therefore, the most likely scenario is that the stock continues rising as traders wait for its earnings report.
A breakout above its all-time high of $236 will point to more gains, potentially to the key resistance level of $300. A drop below the key support level of $213 will invalidate the bullish view.
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