Key Insights
- Nvidia stock jumped by over 4.7% in extended hours.
- The company published strong earnings and boosted its guidance.
- There is a risk that data center delays in the US are continuing.
Nvidia stock jumped by over 4.7% in the extended session. This happened after the company delivered another stellar earnings report that beat analysts’ estimates in most metrics.
NVDA jumped to $219, paring back some of the losses it made in the past few days. These results suggest that it has more room to run despite some notable risks.
Nvidia Stock Jumps After Earnings
Nvidia published strong financial results that will clearly push analysts to adjust their expectations. Its revenue jumped to $96 billion in the quarter, much higher than the $92 billion that analysts were expecting. Its net income jumped from $26.4 billion in Q2 ’26 to nearly $60 billion.
The company’s gross margin jumped to 75%, a growth that may continue as the company plans to hike prices of its GPUs and servers. Additionally, Nvidia boosted its earnings estimates for next year.
The management now expects that its revenue will jump by 70% next year. That’s much higher than the 40% that analysts were expecting.
These numbers mean that the company is firing on all cylinders. It’s a notable thing for a company trading at bargain prices. It now has a forward price-to-earnings ratio of 22, slightly above the S&P 500 Index’s average of 20.
Also, the company continues to aggressively buy back its stock and has $90 billion remaining in its buyback authorization.
Most notably, the company’s growth will likely be better than this for two main reasons. First, historically, Jensen Huang and the team have maintained a highly conservative approach to their forward guidance.
For example, when delivering the Q1 earnings, they guided revenue of $92 billion in Q2. In reality, the revenue metric was over $96 billion.
Second, the company’s guidance assumed zero GPU sales to China. In reality, the company has started to ship a limited number of chips to the country, and this trend may continue. Chips will likely be a main point of discussion when Trump meets with Xi Jinping at the White House next month.
Potential Risks are Emerging
Despite the rosy projections, some potential risks may hinder Nvidia’s growth. One of them is the fact that OpenAI has released a chip known as Jalapeno. In a statement this week, the company said that this chip can outperform Nvidia processors.
With Nvidia hiking prices, it means that OpenAI may use more of this chip in the future. The only limitation that OpenAI has in this is that Nvidia is a big investor in the company. As part of the investment, OpenAI has committed to keep buying Nvidia’s chips, especially in the upcoming Ohio data center.
More companies are working on their chips. Last week, Google expanded its relationship with Marvell Technologies to boost its ASIC chip. Companies like Microsoft and Amazon are also boosting the performance of their chips.
Another risk is that many data centers planned in the United States are seeing delays. According to Kimmeridge, a top LNG company, 50% of these data centers face delays because of power issues.
NVDA Stock Price Technical Analysis
The daily chart shows that the NVDA stock price has slumped in the past few days as investors waited for its earnings report. This sell-off ended in extended hours as the stock soared to $220 as investors cheered the report.
The stock has remained above the 200-day moving average and the important resistance level of $213. That was the highest point in July and the neckline of the double-bottom pattern. Therefore, there is a possibility that the stock will jump to a new record high in the coming weeks or months.
The post Nvidia Stock Forecast as Earnings Boom Despite Data Center Delay Risks appeared first on The Market Periodical.