Nvidia's Earnings on Aug. 27: What History Tells Us About Nvidia Stock's Post-Earnings-Release Moves

Core Viewpoint - Nvidia's stock performance post-earnings will significantly depend on news regarding the H20 chip for China and the related Q3 guidance [1][15]. Group 1: Earnings Report Expectations - Nvidia is set to report its Q2 fiscal 2026 results on August 27, 2023, after market close [1]. - The upcoming report is highly anticipated as Nvidia is a key indicator for the AI sector and the broader market, being the largest AI company by market cap and the largest stock on the S&P 500 [2]. - Nvidia's Q2 results will not include any sales of the H20 chip to China due to U.S. government export controls [3]. Group 2: Financial Metrics and Guidance - Nvidia's projected Q2 fiscal 2026 revenue is $45 billion, reflecting a 50% growth compared to the previous year, while Wall Street's consensus estimate is $46 billion with a 53% growth expectation [4]. - Adjusted earnings per share (EPS) for Q2 is projected at $0.98, indicating a 44% growth, compared to Wall Street's estimate of $1.01, which reflects a 48% growth [4]. - Wall Street anticipates Q3 revenue of $52.5 billion, representing a 50% year-over-year growth, and adjusted EPS of $1.19, or 47% year-over-year growth [12]. Group 3: Historical Performance and Trends - Nvidia has a strong track record of exceeding Wall Street's earnings estimates, with 90% of the last 20 quarters resulting in earnings beats [7]. - The most recent four quarters have shown a perfect record of 100% earnings beats, although the magnitude of these beats has been smaller recently [5][7]. - Historical stock price movements post-earnings releases indicate that even with earnings beats, stock price changes can vary significantly due to other market factors [11]. Group 4: H20 Chip and Market Dynamics - The guidance for Q3 is particularly important as it may include H20 chip sales, which have recently been approved for export by the U.S. government, albeit with a 15% revenue share to the government [13]. - Recent reports suggest Nvidia has instructed some suppliers to halt production of the H20 chip due to a directive from the Chinese government, which could impact expected sales [13]. - The stock's movement will largely depend on the developments regarding the H20 chip and the management's commentary during the earnings call [15].