On Wednesday, August 26, Nvidia (NVDA) will report its second-quarter financial results, and all eyes are on the event. The analysts' consensus forecast suggests record revenue — nearly $92 billion, while net profit, by my calculations, could grow by 95%, exceeding $51.5 billion. These are not just numbers — they are a barometer for the entire technology sector.
Nvidia's report will be a litmus test for the entire artificial intelligence industry. The company's guidance will determine capital expenditures for chipmakers, cloud giants, and AI startups. It is already clear how Wall Street's dependence on this player is growing: Nvidia has beaten earnings expectations for 14 consecutive quarters. Last quarter, net profit soared 210% year over year, while the market expected 126% — data I consider key to understanding the dynamics.
However, such a streak of success raises the bar to the skies. The company approaches the report amid its longest losing streak in share prices since 2022. Over the year, analysts have raised sales forecasts from $78 billion to $92 billion, reflecting both optimism and the risk of overheated expectations.
AI bubble or new reality?
More is at stake than the results of one corporation. OpenAI recently admitted to investors that quarterly revenue grew only 18%, while losses increased. The largest cloud companies are increasingly building data centers with borrowed funds, turning AI spending into the main threat to market stability. Nvidia, in turn, is hedging the industry: the company is participating in a $500 billion AI financing program with banks and has invested in the energy company Cloverleaf Infrastructure.
The options market is pricing in a 5.3% move in the stock after the release, with shares having reacted with an average decline of 4.8% over the past year. The main bets are concentrated in the $205–210 range — traders fear that expensive memory and higher borrowing costs will force buyers to cut AI spending. But not everyone is pessimistic: analysts at HSBC and Bank of America are raising price targets, seeing in Nvidia stronger supplier contracts and contributions to open-source software.
Wednesday's report will show whether Nvidia can maintain its growth pace despite constantly rising expectations. My verdict: even if the numbers turn out to be record-breaking, the market has already priced this in. The key signal is the guidance for the next quarter and comments on demand. If the company fails to surprise, a correction is inevitable, and then not only NVDA will suffer, but the entire AI sector as well.