Should You Buy Nvidia Stock Before Aug. 27? Wall Street Has a Compelling Answer

Key Points

• Investors will be on the edge of their seats when Nvidia releases its quarterly financial report later this month.

• Despite being the world's largest company, Wall Street is becoming even more bullish on the chipmaker.

• Nvidia's Blackwell processor and the resumption of sales to China could spark the stock's next run higher.

• 10 stocks we like better than Nvidia ›

The most profound change in the tech landscape in recent memory comes courtesy of advancements in artificial intelligence (AI). These next-generation algorithms are being applied to a dizzying number of new use cases, but they require an extraordinary amount of computational horsepower.

Arguably, the biggest beneficiary of this secular tailwind has been Nvidia (NASDAQ: NVDA). The company's graphics processing units (GPUs), which were pioneered to create lifelike images in video games, proved equally adept at providing the lightning-fast speeds necessary for AI training and inference. The explosive demand for Nvidia's AI chips has fueled the company's meteoric rise. Since the dawn of AI in early 2023, Nvidia stock has climbed a heady 1,140% (as of this writing), turning the company into the de facto poster child for AI.

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Nvidia has a lot riding on its second quarter financial results, which are scheduled to be released after the market closes on Aug. 27. Heading into this critical report, let's look at recent developments, what Wall Street is saying, and what investors can expect.

Image source: Getty Images.

Paint by numbers

After two consecutive years of triple-digit revenue and profit growth, Nvidia's growth rate has inevitably slowed, but the results are impressive nonetheless.

In the company's fiscal 2026 first quarter (ended April 27), the results were enviable by any standard. Nvidia delivered record revenue of $44.1 billion, up 69% year over year, while its adjusted earnings per share (EPS) of $0.81 climbed 33%.

The profit picture requires context, however. Early in Q1, the Trump Administration issued a moratorium on H20 chip sales to China (which has since been lifted). Nvidia took a $4.5 billion charge for the affected inventory. If not for this one-time charge, adjusted EPS of $0.96 would have jumped 62%. The profits in accordance with generally accepted accounting principles (GAAP) were also solidt, increasing 27% to $0.76.

Estimates vary regarding the impact of resuming chip sales to China. Stifel analyst Ruben Roy cited pent-up demand fueling $19.5 billion in H20 chip sales this year. Analysts' consensus estimates had previously pegged Nvidia's fiscal 2026 revenue at $201 billion, so resuming sales to China could potentially boost revenue by 10%, though the final tally will depend on the availability of manufacturing capacity.

The biggest growth driver for Nvidia is sales of the company's AI-centric Blackwell architecture. In the first quarter, CFO Colette Kress noted that the Blackwell ramp had expanded to "all customer categories," making it "the fastest ramp in company history."

Nvidia's strong record of innovation has kept the company at the forefront of the AI revolution, and it appears that won't be changing anytime soon.

What Wall Street is saying right now

Ahead of Nvidia's important report later this month, Wall Street is increasingly bullish. Analysts' consensus estimates are calling for revenue of $45.75 billion, or growth of about 53%, resulting in EPS of $1.00, an increase of 47%. Nvidia has a remarkable track record of consistently beating its own expectations and those of Wall Street, so the consensus could well be conservative.

Of the 65 analysts who offered an opinion in August, 89% rate Nvidia stock a buy or strong buy, and only one recommends selling. The average price target of $187 suggests modest upside of about 3%.

One of the more bullish takes comes courtesy of Loop Capital analyst John Donovan. He maintained a buy rating on the stock and recently increased his price target to $250, or potential upside for investors of 38%. The analyst cites channel checks with cloud providers, which suggest an ongoing surge in demand. He goes on to suggest that the market for data center GPUs could soar to $2 trillion by 2028. As the industry leader, Nvidia is well-positioned to benefit from the trend.

Finally, there's the subject of valuation. Nvidia stock is currently selling for roughly 31 times next year's earnings. While that's a slight premium, it's worth considering the context. Nvidia's revenue has soared 832% over the past five years (as of this writing), while its net income has risen 1,310%. This has fueled a stock price surge of 1,490%. The ability to consistently generate market beating returns, particularly gains of that magnitude, is rare. This helps to illustrate why Nvidia is deserving of a premium.

Wall Street's position is clear. Nvidia stock is a buy. We'll know more after the company reports its Q2 results after the market close on Wednesday, Aug. 27.

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Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.