Nvidia (NVDA) heads into its fiscal second-quarter earnings report on Aug. 26 with expectations once again running high. Wedbush analyst Matt Bryson believes the chipmaker could deliver another beat and raise, but supply rather than demand may determine how much growth Nvidia can actually capture.
One thing that remains consistent about Nvidia is its performance; Nvidia shares remain up nearly 14% from the start of 2026 despite a recent pullback. Still, the stock is down about 10% below its May 52-week high of $236. Barchart data shows the shares have gained more than 11% from their recent July low, suggesting investors remain willing to buy the dip ahead of earnings.
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www.barchart.com Nvidia’s Growth Is Running Into a Supply Question
The key issue heading into Nvidia’s results is increasingly how quickly it can deliver AI systems amid supply constraints. Memory shortages are pushing costs higher, with Nvidia reportedly notifying major customers that prices for AI servers could rise by more than 15%, particularly for systems using Vera Rubin and Grace Blackwell chips.
That makes the company’s outlook especially important. A strong quarter may already be priced in, but guidance showing Nvidia can keep ramping shipments despite component shortages could provide the next major catalyst for NVDA stock.
The Last Quarter Set a High Bar
Nvidia will report its Q2 earnings on Aug. 26 after the market close in the U.S.
For the current quarter, Nvidia previously guided to $91 billion of revenue, plus or minus 2%. Wall Street expectations have moved slightly above that level, with analysts expecting an average earnings estimate of $2.09 per share.
Options markets are pricing a 6% move in either direction after earnings, roughly $324.5 billion in market value swinging in a single session. That's significantly above Nvidia's 3.7% average absolute reaction over the last eight reports.
Nvidia has beaten consensus estimates for four straight quarters. Last quarter (Q1 FY2027), revenue hit $81.6 billion, up 85% year-over-year (YoY), with EPS of $1.87 beating the $1.77 forecast. But here's the paradox: every single beat was met with a selloff. The market has priced in excellence and is now demanding perfection.
Nvidia Is Expanding Beyond GPUs
The company is also using its balance sheet and technology platform to build a broader AI ecosystem. Nvidia recently agreed to a $6 billion technology-licensing deal with Poolside and plans to invest another $1 billion in the startup while also hiring more than 100 Poolside employees for its AI model efforts.
Nvidia is also reportedly discussing an investment in AI search company Perplexity, which could be valued above $30 billion in a new funding round.
However, if we look at valuation aspects, NVDA is not a low-priced stock on conventional measures. Its trailing price-to-earnings (P/E) ratio is at about 38x, and its price-to-sales (P/S) ratio is at roughly 24x.
The forward picture is more favorable. BMO recently said Nvidia trades around 18x forward earnings and argued that valuation looks reasonable relative to the company’s expected growth and upcoming Vera Rubin systems.
Wall Street Still Favors NVDA Stock
Analyst sentiment remains heavily tilted toward the bullish side. According to Barchart, NVDA stock carries a “Strong Buy” consensus based on 48 analyst recommendations, while the average price target is $306.92, implying more than 44% upside from recent levels.
Wedbush’s Bryson sees another opportunity for Nvidia to exceed expectations, supported by strong AI infrastructure spending. The bigger question, however, may be whether Nvidia has enough supply to convert that demand into revenue growth.
For Nvidia stock, a beat alone may not be enough; investors are likely to focus heavily on whether management can raise the next-quarter outlook without signaling that supply is becoming a larger constraint.
www.barchart.com On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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