Is May 28’s Earnings Report the Catalyst for Nvidia’s Bottom-Buying Opportunity?

The semiconductor sector is a battlefield of innovation and geopolitical tension, but few companies embody this duality as starkly as NVIDIA (NVDA). As the May 28 earnings report approaches, investors are bracing for a potential inflection point—one that could redefine the stock’s trajectory amid $5.5 billion in lost revenue from U.S.-China trade wars and rising competition from rivals like Huawei. Yet beneath the noise lies a company with $43.3 billion in annualized revenue growth, unmatched AI leadership, and a roadmap to dominate a $10 trillion market by 2030. For value hunters, this may be the moment to act.

Near-Term Catalysts: Why May 28 Could Be a Game-Changer

1. Earnings Beats & Guidance: A Track Record of Outperformance

NVIDIA has beaten EPS estimates 100% of the time over the past 12 months, defying expectations even as growth slows. Analysts project Q2 2025 EPS of $0.64 and revenue of $28.7 billion, but the real prize is management’s outlook for the October quarter. A strong forward guidance could validate the stock’s $132.95 price (as of May 22), which trades at a 35.5x P/E—expensive by historical standards but justified by its 71% non-GAAP gross margins and AI-driven growth.

2. Blackwell Chip Timeline: The Next Generation of AI Dominance

The launch of NVIDIA’s next-gen Blackwell architecture is pivotal. Delays could push revenue to future quarters, but an on-time debut would solidify its lead in generative AI and robotics. CFO Colette Kress’s earnings call remarks on customer ROI and supply chain resilience (e.g., HBM3E memory partnerships with SK Hynix) will be scrutinized for clues.

3. Geopolitical Tensions: A Ceiling or a Catalyst?

The U.S.-China AI cold war looms large. While export restrictions have cost NVIDIA $5.5 billion in potential revenue, CFO Kress has noted that 90% of its China sales comply with U.S. rules. Meanwhile, competitors like Huawei’s Ascend 910C chip face yield-rate hurdles and U.S. scrutiny. A diplomatic thaw or a strategic partnership (e.g., with European suppliers) could ease supply chain risks.

Long-Term Fundamentals: Why This Is a Decade-Long Opportunity

AI’s Unstoppable Growth: NVIDIA’s Cash Machine

NVIDIA’s Data Center revenue hit $115.2 billion in 2024, fueled by hyperscalers and startups alike. The generative AI boom isn’t peaking—it’s accelerating. By 2030, AI could account for $10 trillion in economic value, with NVIDIA’s GPUs powering 90% of cloud-based AI workloads. Even if China’s market share dips, global demand for its AI-as-a-Service platform (e.g., AI Foundations) is unstoppable.

Moats That Competitors Can’t Match

• Software Ecosystem: Over 80,000 AI developers use CUDA and Omniverse, creating switching costs.
• R&D Powerhouse: NVIDIA spent $6.7 billion on R&D in 2024, outpacing Intel and AMD combined.
• Hardware-Software Synergy: Its AI chip-to-cloud stack (e.g., Blackwell, Grace Hopper) leaves rivals scrambling to catch up.

Valuation: A Premium Worth Paying

At a PEG ratio of 1.02, NVIDIA’s valuation is underpinned by 23% annual earnings growth expectations. While geopolitical risks are real, the stock’s $3.6 billion in operating cash flow and $130 billion annual revenue provide a fortress balance sheet to weather storms.

Addressing the Risks: Why This Isn’t a Buy-and-Forget Play

1. China’s AI Ambitions: A Threat or a Partner?

Huawei’s 910C chip and its 50% market share in China’s AI infrastructure are a concern, but they also highlight a truth: NVIDIA’s software ecosystem is irreplaceable. Even Chinese firms like DeepSeek license NVIDIA’s CUDA architecture, creating a symbiotic relationship.

2. Supply Chain Vulnerabilities: Manageable, Not Catastrophic

NVIDIA’s reliance on TSMC and SK Hynix is a risk, but its $130 billion revenue run rate gives it leverage to secure partnerships. The recent ramp-up of H20 GPU production and the Blackwell roadmap suggest it’s ahead of demand.

3. Geopolitical Volatility: A Temporary Drag

The U.S.-China trade war is a headwind, but it’s also a catalyst for NVIDIA’s $10 billion data center investments in Europe and the U.S.. As companies diversify supply chains, NVIDIA’s global footprint becomes a strength.

The Bottom Line: A Buy at These Levels

The May 28 earnings report is a critical test for NVIDIA’s narrative. A beat on revenue and a bullish October outlook could unlock $200+ valuation—a 50% upside from current levels. Even if short-term risks linger, the long-term AI opportunity is too vast to ignore.

For investors, this is a high-conviction entry point:
- Buy now at $132.95 for exposure to AI’s $10 trillion future.
- Set a stop-loss at $120 (April lows) to guard against guidance misses.
- Hold for 3+ years to capture Blackwell’s impact and the AI-as-a-Service monetization.

The earnings report is the catalyst—but the real story is NVIDIA’s unshakable grip on the future of computing. Don’t miss it.

Data as of May 22, 2025. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.