Nvidia (NVDA) is scheduled to report its quarterly results next week, providing a crucial catalyst for the overall market. However, some analysts worry that investors have become so accustomed to standout results from the AI chip maker that even better-than-projected earnings won’t be enough to satisfy the market.
Looking ahead to NVDA’s results, SA analyst Julia Ostian argued that the company has beaten expectations so consistently that the market now expects results to exceed already elevated forecasts. This creates a scenario where strong fundamental performance could still trigger a stock slide.
“It really looks like it doesn’t matter what Nvidia will do,” Ostian said on a recent episode of the Investing Experts Podcast. “The market will not be as happy, because it looks to me that the company so many times has beaten the expectations that basically right now the expectations are that everything will be better than expected.”
There is some evidence over the past couple of quarters of the impact Ostian describes. Following its last earnings report, released after the close on November 19, NVDA dropped about 3% the following day. Shares had climbed in after-hours action following the release of better-than-expected results, but they lost steam during the following session.
Looking further back, the stock dipped fractionally following its August earnings release. However, last May saw the stock rise 3% following its quarterly report.
Turning to NVDA’s long-term fundamentals, analysts still see NVDA as well-positioned to take advantage of the AI boom for the foreseeable future. Fellow SA analyst Jack Bowman pointed to the company’s manufacturing strategy, which helps it preserve margins.
“Nvidia is always an interesting business to me because they have such a high profit margin, it’s like 70% on their stuff, because they don’t actually manufacture their own chips, right? It’s TSMC does the actual making of the chips,” he said.
Meanwhile, analyst Kenio Fontes contended that even with hyperscalers looking to diversify away from NVDA’s products, the company has a multi-year runway.
“I think in the short term in 2026, 2027, maybe 2030, it will be very bullish for Nvidia because Amazon is trying to reduce this dependence on Nvidia chips, same for Google. It’s not that short term, they can’t just produce a new chip to their cloud business in three or five years,” Fontes stated.
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