Nvidia reports fiscal second-quarter earnings on August 26, with the call scheduled for 5 p.m. ET. The quarter ended July 26, and analysts are looking for roughly $92 billion in revenue, according to TipRanks consensus from 37 analysts, with EPS estimates landing at $2.08 (TipRanks) or $2.01 (Zacks, from 11 analysts).
The beat streak
Nvidia has topped its own guidance for three straight quarters. In October it guided to $54 billion and delivered $57 billion. In January it guided to $65 billion and delivered $68.1 billion. In April it guided to $78 billion and delivered $81.6 billion. The beats have been $3 billion, $3.1 billion, and $3.6 billion, respectively.
That pattern is part of why Bank of America expects Nvidia to land at $94-95 billion for Q2, implying a $3-4 billion beat against the company's $91 billion guide. The guide itself implies sequential growth of 11.5% from Q1. BofA's $95 billion figure implies 16% growth. Both would be the slowest pace in more than a year, though year-on-year revenue growth is still expected to be roughly 97%.
What the analysts are watching
Bank of America's Vivek Arya models Q3 guidance of $107-108 billion. He has a Buy rating and a $350 price target. Goldman Sachs' James Schneider also has a Buy, with a $285 target. Schneider expects meaningful upside to guidance but warns the bar is high after a 12% two-week run in the stock.
The options market is pricing a 6.75% move for Nvidia stock on contracts expiring August 28. That range sits near $209 to $239. The stock traded around $224 on Wednesday after closing at $217.50.
The memory cost squeeze
Memory costs now account for 40% to 50% of the cost to build a system, up from 15% to 20% previously. Bank of America sees Nvidia's margins holding near 73% to 74%, with the memory hit on Rubin racks about 60 basis points. Larger pod systems could see a 500-basis-point impact.
Nvidia moved its Vera Rubin platform into full production on May 31, with shipments starting in the fall. The company has also invested roughly $70 billion into partners, including $30 billion in OpenAI.
The earnings call on Tuesday will be the first chance to hear how management frames the memory cost pressure and whether Q3 guidance lands in the $107-108 billion range that Arya models. The stock's reaction may hinge on that number more than the Q2 beat itself.
