NVIDIA Stock Faces 7.4% Swing as Earnings Loom

NVIDIA, a leading manufacturer of artificial intelligence chips, is set to release its quarterly earnings report on May 28. The company's stock price has historically shown significant volatility following earnings announcements, with fluctuations as high as 11.4% in the past eight quarters. This volatility is expected to continue, with analysts predicting that the stock could move by as much as 7.4% in the days following the earnings release.

NVIDIA's stock price experienced a decline of 8.5% in February, despite the company reporting earnings that exceeded market expectations for the fourth quarter of the previous year. However, the company's guidance for the first quarter's gross margin fell short of market expectations. Following the earnings release, the stock price fluctuated between a 2.8% increase and an 8.6% decrease, with a total range of 11.4%.

Despite the significant volatility in NVIDIA's stock price following earnings releases, investors who have held the stock have seen substantial returns. Over the past decade, investors who purchased NVIDIA stock before earnings releases and held it for 12 months saw an average return of nearly 120%.

In the lead-up to the May 28 earnings release, NVIDIA's stock price has been influenced by several factors, including the development of artificial intelligence in China and the fluctuating trade policies of the Trump administration. The company's stock price has faced challenges due to concerns over the high costs of AI infrastructure and potential slowdowns in spending by major tech companies. Additionally, export restrictions on chips and global tariffs have further impacted NVIDIA's stock price.

However, factors such as a temporary trade ceasefire between the U.S. and China, NVIDIA's expanding business prospects overseas, and the potential lifting of restrictive chip trade policies by the Trump administration have provided some support to the stock price ahead of the earnings release.

Analysts on Wall Street anticipate that NVIDIA's revenue and earnings for the first quarter of the 2026 fiscal year, ending in April, will see significant growth, although the pace of growth may continue to slow. The company is expected to report revenue growth of over 66%, reaching 43 billion, and adjusted earnings per share are projected to increase by 44% to 0.88 dollars. In comparison, during the first quarter of the previous year, NVIDIA's revenue grew by 262%, and earnings per share increased by 461%.

Investors will be closely monitoring the impact of Trump's restrictions on NVIDIA's sales of chips to China in the upcoming earnings report. NVIDIA's CEO, Jensen Huang, has stated that this policy has resulted in a loss of 1.5 billion in sales for the company. The earnings report will provide valuable insights into NVIDIA's financial performance, strategic initiatives, and future growth prospects in the rapidly evolving AI industry.