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Is NVIDIA Set for Another Earnings Beat? ETFs in Focus
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Key Takeaways
NVIDIA's AI demand and Blackwell momentum support strong Q2 growth.
Attractive valuation could strengthen NVIDIA's investment case ahead of earnings.
NVIDIA-heavy ETFs offer diversified exposure while reducing single-stock risk.
NVIDIA Corporation (NVDA - Free Report) is scheduled to report fiscal 2027 second-quarter results after the market closes on Aug. 26. NVIDIA’s strong AI demand, Blackwell momentum, and emerging CPU opportunities support its long-term outlook.
With hyperscalers boosting AI spending, investors will watch how much of that investment will fall into NVIDIA’s kitty. Plus, the compelling valuation of NVDA stock makes it better-positioned ahead of earnings.
However,attention may also be placed on management commentaries on rising memory costs and chip shipments to China. While there are strict conditions from the U.S. government on NVIDIA’s H200 chip exports to China, import review in China has also been stringent.
NVIDIA is reportedly plans to hike prices (by more than 15% in many cases) for some of its largest customers, per Bloomberg, as quoted on CNBC. It could take effect on systems shipped early next year. The move, if enacted, should help NVIDIA’s margin restoration amid rising costs.
What to Expect in Q2: Beat, Match or Miss?
According to our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a positive Earnings ESP, increases the chances of an earnings beat, while companies with a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NVIDIA currently has a Zacks Rank #2 and an ESP of +0.92%. The company has surpassed earnings estimates in the past four quarters, with an average surprise of 5.52%.
Guidance for Q2
Notably, NVIDIA delivered 85% year-over-year revenue growth in Q1, while Data Center revenue jumped 92% to $75.2 billion. For fiscal Q2, management expects revenues of $91 billion, plus or minus 2%, roughly matching the Zacks Consensus Estimate of $91.9 billion, up 96.51%.
Management has also projected about $1 trillion in combined Blackwell and Rubin revenue from 2025 through 2027. On the earnings front, the Zacks Consensus Estimate of $2.09 for Q2 implies 99% year-over-year growth.
NVIDIA’s AI Positioning Supports Growth
NVIDIA continues to strengthen its position across the AI infrastructure market, with hyperscalers, cloud providers and AI developers relying on its GPUs, networking products and computing platforms.
Data Center Demand Remains Steady
NVIDIA’s Blackwell platform remains a major growth engine, per Barchart, as quoted on Yahoo Finance. During the first-quarter call, management noted that Blackwell has been adopted and deployed by every major hyperscaler, cloud provider and leading model builder. NVIDIA’s networking business is gaining importance.
CPUs: Another Growth Opportunity
NVIDIA is expanding beyond GPUs to the server CPU market with its Vera CPU architecture. Vera Rubin – a next-generation, rack-scale infrastructure designed for Agentic AI – is on track for the second half of this year, with production shipments expected in the third quarter.
The company estimates the addressable CPU market at roughly $200 billion and expects its CPU business to generate about $20 billion in revenues this year, as quoted on Yahoo Finance.
China Sales Could Provide a Fresh Boost
Recent H200 deliveries to China could unlock a significant revenue opportunity for NVIDIA, with JPMorgan estimating roughly $3 billion in additional revenue for every 100,000 units shipped, as quoted on a Yahoo Finance article.
Strong Financial Position
NVIDIA maintains a robust balance sheet with limited reliance on debt. Its total debt-to-equity ratio stands at just 3.8%, well below the electronic-semiconductor industry average of 13.5%. NVIDIA’s long-term-debt-to-capital ratio stands at 3.7% compared with the industry average of 14.3%, highlighting the company’s relatively low leverage and strong financial position.
NVIDIA’s s free-cash-flow-to-investment ratio stood at a strong 79.61%, which is expected to slip slightly to 75.24% in 2026 and 73.87% in 2027. Rising capex can be held responsible for the slight dip in the strong free cash flow ratio.
Analyst Upped Estimates Recently
Over the past week, one of 12 analysts covering NVDA raised the earnings estimate for the to-be-reported quarter, and two analysts upped estimates for the fiscal 2027. No analysts cut estimates over the past 60 days.
Compelling Valuation
NVIDIA also trades at a forward P/E of 24.07, below the Semiconductor-General industry average of 35.68, suggesting a relatively reasonable valuation. The valuation looks relatively attractive compared with its close peer Advanced Micro Devices (AMD - Free Report) , which tradesat about 63.18 times forward earnings and Intel (INTC - Free Report) , which trades at 61.46 times forward earnings.
However, among other peers, Qualcomm (QCOM - Free Report) trades at a cheaper valuation of 15.25X and Broadcom (AVGO - Free Report) trades at a decent forward P/E of 31.39X.
Eyeing Shareholder Return
NVIDIA plans to boost shareholder returns, as it raised its quarterly dividend to 25 cents and authorized $80 billion in additional buybacks on May 18, 2026. With $39 billion still available under its existing plan, the company expects to return about 50% of its free cash flow in fiscal 2027.
Based on short-term price targets offered by 37 analysts, the average price target for Broadcom Inc. comes at $521.52. The forecasts range from a low of $380.00 to a high of $675.00. The average price target represents an increase of 41.54% from the closing price of $368.45 recorded on Aug. 21, 2026.
However, rising rate worries and concerns about the timeline for AI investment payoffs are hurting the tech space in recent times. So far this year, the NVDA stock is up by a modest 10.4% (as of Aug. 24, 2026). The stock lost about 3% yesterday.
Against this backdrop, investors can play the stock with the basket or ETF approach. The ETF approach minimizes company-specific risks. With NVIDIA being a key stock in the AI trade, any negative commentary may hit the stock hard. In this scenario, the ETF approach offers a cushion to investors.
NVIDIA-heavy ETFs include the likes of Global X PureCap MSCI Information Technology ETF (GXPT - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) , VanEck Technology TruSector ETF (TRUT - Free Report) and iShares Top 20 U.S. Stocks ETF (TOPT - Free Report) . These funds invest in NVIDIA in the range of 14% to 20%.
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Is NVIDIA Set for Another Earnings Beat? ETFs in Focus
Key Takeaways
NVIDIA Corporation (NVDA - Free Report) is scheduled to report fiscal 2027 second-quarter results after the market closes on Aug. 26. NVIDIA’s strong AI demand, Blackwell momentum, and emerging CPU opportunities support its long-term outlook.
With hyperscalers boosting AI spending, investors will watch how much of that investment will fall into NVIDIA’s kitty. Plus, the compelling valuation of NVDA stock makes it better-positioned ahead of earnings.
However,attention may also be placed on management commentaries on rising memory costs and chip shipments to China. While there are strict conditions from the U.S. government on NVIDIA’s H200 chip exports to China, import review in China has also been stringent.
NVIDIA is reportedly plans to hike prices (by more than 15% in many cases) for some of its largest customers, per Bloomberg, as quoted on CNBC. It could take effect on systems shipped early next year. The move, if enacted, should help NVIDIA’s margin restoration amid rising costs.
What to Expect in Q2: Beat, Match or Miss?
According to our methodology, a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) when combined with a positive Earnings ESP, increases the chances of an earnings beat, while companies with a Zacks Rank #4 or 5 (Sell rated) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NVIDIA currently has a Zacks Rank #2 and an ESP of +0.92%. The company has surpassed earnings estimates in the past four quarters, with an average surprise of 5.52%.
Guidance for Q2
Notably, NVIDIA delivered 85% year-over-year revenue growth in Q1, while Data Center revenue jumped 92% to $75.2 billion. For fiscal Q2, management expects revenues of $91 billion, plus or minus 2%, roughly matching the Zacks Consensus Estimate of $91.9 billion, up 96.51%.
Management has also projected about $1 trillion in combined Blackwell and Rubin revenue from 2025 through 2027. On the earnings front, the Zacks Consensus Estimate of $2.09 for Q2 implies 99% year-over-year growth.
NVIDIA’s AI Positioning Supports Growth
NVIDIA continues to strengthen its position across the AI infrastructure market, with hyperscalers, cloud providers and AI developers relying on its GPUs, networking products and computing platforms.
Data Center Demand Remains Steady
NVIDIA’s Blackwell platform remains a major growth engine, per Barchart, as quoted on Yahoo Finance. During the first-quarter call, management noted that Blackwell has been adopted and deployed by every major hyperscaler, cloud provider and leading model builder. NVIDIA’s networking business is gaining importance.
CPUs: Another Growth Opportunity
NVIDIA is expanding beyond GPUs to the server CPU market with its Vera CPU architecture. Vera Rubin – a next-generation, rack-scale infrastructure designed for Agentic AI – is on track for the second half of this year, with production shipments expected in the third quarter.
The company estimates the addressable CPU market at roughly $200 billion and expects its CPU business to generate about $20 billion in revenues this year, as quoted on Yahoo Finance.
China Sales Could Provide a Fresh Boost
Recent H200 deliveries to China could unlock a significant revenue opportunity for NVIDIA, with JPMorgan estimating roughly $3 billion in additional revenue for every 100,000 units shipped, as quoted on a Yahoo Finance article.
Strong Financial Position
NVIDIA maintains a robust balance sheet with limited reliance on debt. Its total debt-to-equity ratio stands at just 3.8%, well below the electronic-semiconductor industry average of 13.5%. NVIDIA’s long-term-debt-to-capital ratio stands at 3.7% compared with the industry average of 14.3%, highlighting the company’s relatively low leverage and strong financial position.
NVIDIA’s s free-cash-flow-to-investment ratio stood at a strong 79.61%, which is expected to slip slightly to 75.24% in 2026 and 73.87% in 2027. Rising capex can be held responsible for the slight dip in the strong free cash flow ratio.
Analyst Upped Estimates Recently
Over the past week, one of 12 analysts covering NVDA raised the earnings estimate for the to-be-reported quarter, and two analysts upped estimates for the fiscal 2027. No analysts cut estimates over the past 60 days.
Compelling Valuation
NVIDIA also trades at a forward P/E of 24.07, below the Semiconductor-General industry average of 35.68, suggesting a relatively reasonable valuation. The valuation looks relatively attractive compared with its close peer Advanced Micro Devices (AMD - Free Report) , which tradesat about 63.18 times forward earnings and Intel (INTC - Free Report) , which trades at 61.46 times forward earnings.
However, among other peers, Qualcomm (QCOM - Free Report) trades at a cheaper valuation of 15.25X and Broadcom (AVGO - Free Report) trades at a decent forward P/E of 31.39X.
Eyeing Shareholder Return
NVIDIA plans to boost shareholder returns, as it raised its quarterly dividend to 25 cents and authorized $80 billion in additional buybacks on May 18, 2026. With $39 billion still available under its existing plan, the company expects to return about 50% of its free cash flow in fiscal 2027.
Time for NVIDIA-Heavy ETFs?
NVIDIA has a good Growth score of B. The stock belongs to a top-ranked Zacks sector as well as industry.
Based on short-term price targets offered by 37 analysts, the average price target for Broadcom Inc. comes at $521.52. The forecasts range from a low of $380.00 to a high of $675.00. The average price target represents an increase of 41.54% from the closing price of $368.45 recorded on Aug. 21, 2026.
However, rising rate worries and concerns about the timeline for AI investment payoffs are hurting the tech space in recent times. So far this year, the NVDA stock is up by a modest 10.4% (as of Aug. 24, 2026). The stock lost about 3% yesterday.
Against this backdrop, investors can play the stock with the basket or ETF approach. The ETF approach minimizes company-specific risks. With NVIDIA being a key stock in the AI trade, any negative commentary may hit the stock hard. In this scenario, the ETF approach offers a cushion to investors.
NVIDIA-heavy ETFs include the likes of Global X PureCap MSCI Information Technology ETF (GXPT - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) , VanEck Technology TruSector ETF (TRUT - Free Report) and iShares Top 20 U.S. Stocks ETF (TOPT - Free Report) . These funds invest in NVIDIA in the range of 14% to 20%.