The Numbers Already on the Table
The sales estimate has moved up sharply over the year. At the start of the year, analysts had Nvidia at $78 billion for the quarter; they're now at $92 billion, according to FactSet. Last quarter the company delivered 130% year-over-year net income growth, just ahead of the 126% Wall Street had forecast.
But there's a wrinkle. Nvidia's stock has fallen in the session after each of its last four earnings reports, despite beating estimates every time. Over the past 12 months, the shares have outperformed the S&P 500 by just under 2% — a thin edge for a company at the center of the AI buildout.
The Costs Piling Up on the AI Stack
The pressure isn't coming from Nvidia's own execution. It's coming from the cost side of the AI economy. Rising memory prices and borrowing costs have raised concerns that the biggest AI spenders could pull back. OpenAI told investors its revenue rose only 18% last quarter while losses deepened, a sign that even the flashiest names in the AI stack aren't printing money.
Hyperscalers are increasingly leaning on debt to fund data centers, and Nvidia is now part of that financing ecosystem. The company joined a $500 billion AI financing plan with banks and took a stake in Cloverleaf Infrastructure, a data center developer. In other words, Nvidia's fate is now partly tied to its customers' ability to keep borrowing.
What the Options Market Is Pricing
Options traders expect a big move. The market prices a 5.3% swing after the report, above the stock's 4.8% average post-earnings move over the past year, according to Option Research & Technology Services. Active put options are concentrated at $205-$210, versus Friday's close of $214.75, per Cboe Global Markets data.
That put positioning suggests some traders are positioning for a pullback even after what's expected to be a blowout quarter. The pattern of the last four earnings cycles — beat, then sell-off — is keeping the bears around.
The Bullish Counter From HSBC
Not everyone's worried. HSBC's Frank Lee raised his price target to $360 from $325, echoing Bank of America's bullish stance. He cited Nvidia's supplier partnerships and its role in open-source AI as reasons to stay long.
The report lands Wednesday after the close. Whether Nvidia's stock finally holds its gains after a beat — or drops for a fifth straight time — is the next thing on the tape. The earnings will almost certainly come in strong
