NVIDIA’s Upcoming Earnings Announcement
NVIDIA (NVDA) is set to report its second-quarter results for FY26 on August 27th. Analysts on Wall Street are predicting the company will disclose earnings per share along with revenues totaling $45.7 billion. Before the announcement, Bank of America analyst Vivek Arya maintained a buy rating on NVIDIA stock, setting a price target of $220, indicating a potential upside of 23% from its current price.
Analyst Insights
Arya, recognized as a top-tier analyst, suggests NVIDIA is likely to surpass earnings expectations, driven by robust demand for the new Blackwell chips and ongoing growth in cloud expenditures. His forecast for second-quarter revenue stands at $47 billion, exceeding both consensus estimates and the company’s $45 billion guidance.
Looking ahead to the third quarter of FY26, Arya anticipates sales could climb to $54 billion, spurred by increased activity around the Blackwell Ultra cargo. He speculates that if NVIDIA resumes shipments of H20 chips for the Chinese market, this figure might even reach $60 billion.
Regarding margins, Arya believes they could improve from the current range of 73-74% in the third quarter, noting that as NVIDIA’s rack-scale products gain popularity, margins could benefit from using previously written H20 inventory, potentially adding 200-300 basis points.
Future Prospects
For the entirety of FY26, Arya’s projections estimate NVIDIA revenues between $21 billion and $21.5 billion, bolstered by the sustained demand for AI solutions and sales to China. He has also raised his EPS estimate to a range of $4.70 to $4.80, compared to the current street estimate of $4.38.
Arya mentioned that significant investments in AI from major companies like Alphabet Inc., Meta Platforms, Oracle Corporation, and Xai could further enhance NVIDIA’s growth potential.
Understanding the Risks
However, Arya did caution about several risks. He highlighted that NVIDIA’s H20 chip sales to China might face scrutiny from regulators, which could lead to security investigations. Additionally, the increasing competition from Chinese manufacturers poses a challenge for NVIDIA’s market position. There’s also the possibility that NVIDIA and Advanced Micro Devices (AMD) will need to regularly update their US export licenses to maintain a competitive edge.
Current Stock Target
As per Tipranks, NVIDIA stock holds a strong buy consensus based on 34 buy ratings, three holds, and one sell in the past three months. Currently priced at $185.79, the target suggests an upside potential of 4.22%.
