Nvidia Stock Poised for a Strong Q2 Earnings Performance, Analyst Says

Stifel's top analyst, Roy, expects Nvidia to deliver another strong quarter, with Q2 revenue expected to reach $45.8 billion, slightly above Nvidia's own outlook. He believes demand remains robust and supply issues are limited, supporting healthy sequential growth into Q3. Despite concerns about an "AI bubble" and a slower-than-expected GPT-5 launch, Roy stresses that hyperscaler capital spending remains strong and Nvidia's lead in AI hardware is intact. He raised his price target to $212 from $202, implying a 19% upside from current levels.

Nvidia Corporation (NVDA) is set to release its Q2 FY 2026 earnings report after the market closes on Wednesday, August 27. Analysts anticipate a record-breaking performance, with projected adjusted earnings per share (EPS) of $1.02 and revenue of $46.45 billion, representing a 50% year-over-year (YoY) increase [1].

Despite this robust outlook, Nvidia faces potential headwinds from China export curbs, which could result in an $8 billion hit. The company has reportedly told suppliers to suspend production of its H20 chip due to security concerns raised by Beijing [3]. This move is expected to impact the company's revenue, particularly in its data center business, which has been a primary growth engine.

Analysts remain bullish on Nvidia's prospects. Twelve out of 13 Wall Street analysts call the stock a "buy," with price targets ranging from $155 to $225 [1]. UBS analyst Timothy Arcuri recently raised his price target to $205 from $175, citing strong demand signals and projecting another beat in the upcoming Q2 earnings report [2].

Stifel's top analyst, Roy, expects Nvidia to deliver another strong quarter, with Q2 revenue expected to reach $45.8 billion, slightly above Nvidia's own outlook. He believes demand remains robust and supply issues are limited, supporting healthy sequential growth into Q3. Despite concerns about an "AI bubble" and a slower-than-expected GPT-5 launch, Roy stresses that hyperscaler capital spending remains strong and Nvidia's lead in AI hardware is intact. He raised his price target to $212 from $202, implying a 19% upside from current levels [4].

Nvidia's strong performance is driven by the continued strength in its Data Center business, which benefits from the increasing adoption of cloud-based solutions and the growing hybrid working trend. The company's AI chips, including the A100, H100, B100, B200, and GB200, are the top choices for building and running powerful AI applications, positioning Nvidia as a leader in the generative AI market [1].

NVIDIA Spectrum-XGS Ethernet, a new technology built for the AI era, enables seamless connection of distributed data centers into unified, giga-scale AI super-factories, overcoming traditional Ethernet limitations with enhanced bandwidth, latency management, and congestion control [3]. This hyperscale networking technology accelerates multi-GPU communication, driving breakthroughs in generative AI and large-scale AI infrastructure.

In conclusion, while Nvidia faces potential challenges from China export curbs, the company's strong product portfolio and leadership in AI make it a compelling investment opportunity. Analysts' overwhelmingly bullish stance suggests that investors should closely monitor Nvidia's earnings report and the company's response to the China export curbs.

References:
[1] https://finance.yahoo.com/news/nvda-buy-nvidia-stock-aug-192124545.html
[2] https://www.ainvest.com/news/ubs-raises-nvidia-price-target-205-q2-earnings-2508/
[3] https://www.tweaktown.com/news/107313/nvidia-spectrum-xgs-connects-data-centers-in-different-cities-to-create-ai-super-factories/index.html
[4] https://www.investopedia.com/what-wall-street-analysts-think-of-nvidia-stock-ahead-of-earnings-wednesday-11796072