Whatever Happens on Wednesday, Nvidia Stock Will Almost Certainly Be Cheaper After Earnings
Whatever Happens on Wednesday, Nvidia Stock Will Almost Certainly Be Cheaper After Earnings
Jeremy Bowman, The Motley FoolWed, August 26, 2026 at 3:35 AM UTC
0
Key Points -
Wall Street analysts have consistently underestimated Nvidia's earnings growth.
Forward estimates have typically gone up after each earnings report.
The stock already looks undervalued compared to the S&P 500.
10 stocks we like better than Nvidia ›
Nvidia (NASDAQ: NVDA) is set to report second-quarter earnings on Wednesday, and the biggest question may be why the stock's once-blockbuster growth has slowed.
Nvidia soared through the first three years of the AI boom, but more recently, its returns have been just average, as the stock is up 19% over the last year, matching the S&P 500.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The chip stock's performance doesn't reflect the reacceleration in the business. It's set to report its fourth straight quarter of improving revenue growth, as analysts are expecting revenue to grow 97.2% to $92.2 billion in its second-quarter earnings report.
With that kind of growth, Nvidia stock has gotten significantly cheaper over the last year as earnings have soared while the share price has remained relatively flat. Based on the analyst earnings-per-share consensus of $9.02 for fiscal 2027, which ends in Jan. 2027, the stock is trading at just 23.6x, putting it roughly even with the S&P 500.
Taking Nvidia's forecasts out further, the stock only looks more attractive.
Image source: Getty Images.
Why Nvidia looks set to get cheaper on Wednesday
For a company growing as fast as Nvidia, forward valuation metrics are more useful than trailing ones. While you might think that Nvidia earnings have been hard to predict, quarterly results have generally been close to Wall Street expectations and in line with Nvidia's own guidance. On a longer-term basis, Wall Street has consistently underestimated the company's growth.
As the chart below shows, through much of 2025, analysts estimated Nvidia's fiscal 2027 EPS to be around $6, though it now appears to be headed for at least $9.
NVDA EPS Estimates for Next Fiscal Year data by YCharts
But there's another thing worth noting in that chart. Nvidia's forward estimates have consistently moved higher over the last year following its earnings reports.
Advertisement
Here is the chart presented again with earnings dates annotated.
NVDA EPS Estimates for Next Fiscal Year data by YCharts
As you can see, the last four earnings reports have come with noticeable increases in consensus forward estimates. That's important because it doesn't just reflect higher forecasts for the current year, which includes the quarter that was just reported, but for future years. You'll also notice that Nvidia's forward estimates have trended higher nearly consistently since the start of 2024, except for a brief period in the first half of last year.
Based on that trend and the recent momentum around the Rubin platform, including SpaceX announcing that it would exclusively build on Nvidia, Nvidia's forward estimates look like a good bet to move higher after Wednesday's earnings report.
If that happens, it will make the stock even cheaper on a forward basis, making it more attractive regardless of which direction it moves after the report.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $431,488!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,279,584!*
Now, it’s worth noting Stock Advisor’s total average return is 958% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of August 25, 2026.
Jeremy Bowman has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Source: “AOL Money”
