AI-Driven Market Momentum and Selective Buy Signals: Strategic Entry Points in AI-Aligned Stocks Post-Nvidia’s Earnings Test

The recent Q2 2025 earnings report from Nvidia (NVDA) has reignited debates about the sustainability of AI-driven valuations while simultaneously creating opportunities for strategic entry into AI-aligned stocks. Despite reporting record revenue of $46.7 billion—a 56% year-over-year increase—Nvidia’s stock fell 3% in after-hours trading, puzzling investors who deemed the results “unspectacular” [1]. This volatility underscores the delicate balance between short-term market sentiment and long-term fundamentals in the AI sector. For investors, the post-earnings dip in NVDA and the mixed reactions in related stocks like Micron (MU), Broadcom (AVGO), and Snowflake (SNOW) present a unique window to assess technical buy signals and geopolitical tailwinds.

The Nvidia Earnings Paradox: Strong Fundamentals, Mixed Market Sentiment

Nvidia’s Q2 results highlighted its dominance in AI infrastructure, with data center revenue surging to $41.1 billion (56% YoY growth) and a 95% market share in AI data centers [2]. However, the stock’s post-earnings decline was driven by two key factors:
1. Short-term revenue shortfalls: Data center revenue missed Wall Street estimates by $200 million, raising concerns about AI spending sustainability [1].
2. Geopolitical uncertainty: Stalled H20 chip sales to China—a $50 billion opportunity—remain unresolved due to U.S. export controls [3].

Despite these headwinds, analysts remain bullish. Morgan Stanley and Mizuho raised price targets to $210 and $230, respectively, citing Nvidia’s structural moats in AI hardware and the projected 35% CAGR in global AI spending through 2030 [2]. The stock’s technical setup further supports a long-term case: NVDA is trading within a large rectangle pattern, with a key resistance level at $185. A sustained break above this level could signal a path to $215, while a pullback to $155 offers a compelling entry point [4].

Strategic Entry Points in AI-Aligned Stocks

Nvidia’s earnings have acted as a catalyst for the broader AI sector, with related stocks like Micron, Broadcom, and Snowflake showing mixed but actionable signals.

Micron (MU): A High-Conviction Buy

Micron, a critical supplier of high-bandwidth memory (HBM) for AI infrastructure, has emerged as a top-tier play. Post-Nvidia earnings, MU’s technical indicators suggest a strong buy case:
- RSI: The 14-day RSI stands at 68.46, indicating momentum in the buy zone [5].
- Moving Averages: The 50-day ($117.76) and 200-day ($115.47) moving averages are aligned with a bullish trend [5].
- Volume: A 5.36% increase in 5-day volume reinforces upward momentum [6].

Analysts at Citi and Bank of America upgraded MU to “Buy,” citing robust demand from hyperscalers and potential gross margin expansion [5].

Broadcom (AVGO): A Steady Growth Play

Broadcom, a leader in semiconductor and software solutions, also benefited from the AI-driven optimism. AVGO’s technical profile is equally compelling:
- RSI: At 67.29, the stock is not overbought and remains in a buy zone [7].
- Moving Averages: The 50-day ($296.05) and 200-day ($297.24) moving averages form a “golden cross,” signaling a bullish trend [7].
- MACD: A reading of 4.010 supports a buy recommendation [7].

With AI infrastructure spending projected to reach $3–$4 trillion by 2030, AVGO’s role in enabling AI workloads positions it as a defensive growth stock [8].

Snowflake (SNOW): A High-Volatility Opportunity

Snowflake’s Q2 earnings beat ($1.1 billion revenue, 32% YoY growth) drove an 18% stock surge, but its technical indicators suggest caution:
- RSI: At 87.327, the stock is in overbought territory, raising short-term sell-off risks [9].
- Moving Averages: The 50-day ($198.87) and 200-day ($205.50) moving averages remain bullish, but the gap above the 21-day EMA indicates volatility [9].

While SNOW’s long-term case is strong (driven by AI-driven data warehousing demand), investors should monitor volume trends and RSI normalization before entering [9].

Geopolitical Tailwinds and AI Infrastructure Growth

The broader AI sector’s trajectory is inextricably linked to geopolitical dynamics. Nvidia’s CEO, Jensen Huang, emphasized the $50 billion China opportunity, with discussions ongoing to resume H20 chip sales [3]. For investors, this uncertainty creates a dual narrative:
1. Short-term risks: Delays in China sales could pressure near-term revenue.
2. Long-term upside: A resolution could unlock $2–5 billion in Q3 H20 revenue alone [10].

Meanwhile, the AI infrastructure market is projected to grow at a 35% CAGR through 2030, with companies like Nvidia, Micron, and Broadcom positioned to capture a significant share [2].

Conclusion: A Contrarian Opportunity in AI

Nvidia’s post-earnings dip and the mixed reactions in AI-aligned stocks highlight a market grappling with valuation concerns. However, the fundamentals—robust demand for AI infrastructure, structural moats in hardware, and geopolitical tailwinds—remain intact. For strategic investors, the current pullback in NVDA and the technical buy signals in MU and AVGO present a compelling case to allocate capital into the AI ecosystem. As the sector transitions from hype to execution, patience and discipline in entry points will be key to capturing long-term value.

Source:
[1] Nvidia (NVDA) earnings report Q2 2026, [https://www.cnbc.com/2025/08/27/nvidia-nvda-earnings-report-q2-2026.html]
[2] NVIDIA Announces Financial Results for Second Quarter [https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2026]
[3] Nvidia Earnings: Stock Falls But CEO Upbeat About China ..., [https://www.investors.com/news/technology/nvidia-stock-nvidia-earnings-live-coverage/]
[4] Nvidia Earnings: Updates and Commentary August 2025 [https://www.kiplinger.com/investing/live/nvidia-earnings-live-updates-and-commentary-august-2025]
[5] MU Technical Analysis, RSI and Moving Averages [https://www.investing.com/equities/micron-tech-technical]
[6] MU Technical Analysis for Micron Technology Stock [https://www.barchart.com/stocks/quotes/MU/technical-analysis]
[7] AVGO Technical Analysis, RSI and Moving Averages, [https://www.investing.com/equities/avago-technologies-technical]
[8] AI-Driven Stocks and Market Volatility in August 2025 [https://www.ainvest.com/news/ai-driven-stocks-market-volatility-august-2025-assessing-momentum-fundamentals-nvidia-snowflake-2508/]
[9] Snowflake (SNOW) Technical Analysis Statistics 2025, [https://altindex.com/ticker/snow/technical-analysis]
[10] Nvidia Stock Gets Price-Target Hikes. Here's Why. [https://www.investors.com/news/technology/nvidia-stock-nvda-q2-2026-earnings-preview/]