NVIDIA’s second-quarter (Q2) results exceeded expectations, and its revenue guidance for the next financial year beat estimates. However, none of this moved the market. The stock declined 1.59% to end at $209.66 on Nasdaq on 26 August.
The chipmaker’s revenue for the July quarter more than doubled to $96.2 billion, while adjusted profit came in at $2.22 per share.
The momentum is expected to remain strong over the next year, with the company targeting a 70% jump in revenue in 2028. Besides, it projected third-quarter revenue of $108 billion, plus or minus 2%.
Is NVIDIA a stock to buy after Q2 results and amid the AI boom?
NVIDIA stock is up 11% year-to-date (YTD). It has a strong growth outlook, and the boom in artificial intelligence is expected to further boost its earnings in the coming quarters.
Gaurav Arora, the head of research at SAHI, highlighted that NVIDIA’s latest numbers show the AI spending boom is still very much alive.
“Revenue more than doubled YoY to $96.2 billion, comfortably beating the company’s own guidance, and EPS also came in well above estimates. What stands out is that the revenue beat was bigger than the earnings beat, which points to genuine demand rather than just cost-cutting. NVIDIA’s CEO also stated that AI has ‘reached its inflection point,’ with many more companies now building large GPU clusters, not just one or two big players. In short, the AI trade is broadening, not fading,” said Arora.
The near-term outlook remains positive, but now expectations are very high. The company expects its revenue to top $100 billion in the third quarter, which can drive the stock further. However, some experts suggest that a little caution is warranted, since most of the good news is already priced in.
The stock may see a sideways consolidation to bring earnings and fundamentals in sync with the price.
“NVIDIA stock has fallen the day after each of its last four earnings reports, even though it beat estimates every time. This shows that simply beating expectations may no longer be enough to sustain the rally; the bar keeps rising,” said Arora.
Arora believes a time-wise correction may occur, where the stock will consolidate rather than fall outright.
“NVIDIA had just snapped its longest losing streak since 2022 heading into results, showing valuations are already stretched, and sentiment is a bit fragile. Rising bond yields add another layer of caution, as higher borrowing costs could make the massive AI capex spending costlier,” said Arora.
Pravesh Gour, a senior analyst at Swastika Investmart, underscored that the bigger takeaway in NVIDIA results is that AI spending appears to be broadening beyond a few hyperscalers.
“Demand is increasingly coming from AI labs, enterprises, sovereign customers and industrial applications. NVIDIA also expects around 70% revenue growth for the fiscal year ending January 2028, suggesting that the company sees the AI infrastructure cycle continuing for several years,” said Gour.
However, this does not mean AI stocks will rise continuously.
Gour underscored that expectations are extremely high, and NVIDIA’s Q3 gross-margin guidance of 74% versus 75% currently indicates some pressure from rising component costs.
“The AI trade can remain hot in the near term, but a correction or consolidation is quite possible after the strong rally. I would view any correction as a potential valuation reset rather than the end of the AI cycle, unless we see a meaningful slowdown in hyperscaler AI capex or NVIDIA’s future guidance,” said Gour.
NVIDIA stock technical outlook
Technical experts highlight that NVIDIA stock is moving higher in a higher-highs and higher-lows formation above its key long-term as well as short-term moving averages
Vipin Kumar, AVP-Research at Globe Capital Market, pointed out that within this positional structure, the stock has been in a short-term consolidation phase in the $190–$230 range for the past five months. At this juncture, it is trading near the midpoint of this congestion range.
“Going ahead, we suggest traders accumulate this stock on dips in a staggered manner around the lower band of the congestion zone, as long as the stock remains above $188 on a closing basis,” said Kumar.
Aditya Thukral, Founder and Analyst of AT Research and Risk Managers, underscored that NVIDIA Corporation has been in a long-term uptrend with the formation of higher highs and higher lows. However, the short-term trend has been sideways, with the stock price hovering between $188 and $232.
Thukral said once this corrective price action ends, the stock might try to move in the larger direction, which is upwards.
“The stock continued to stay above the 200-day EMA, which defines the long-term trend. A sideways correction is always followed by another leg of rally, and the same seems to be happening now, and in this process, the stock has never broken the previous swing low, which is $165 in this case, and will remain the invalidation point for bulls,” said Thukral.
“The stock has been showing sideways price action, and fresh buying could only be seen from the range bottom of $188 or near the 200-day EMA. Investors need to keep patience while holding this stock, and a fresh leg of rally might take another couple of months to resume,” Thukral said.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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