Whatever Happens on Wednesday, Nvidia Stock Will Almost Certainly Be Cheaper After Earnings

NVDA heads into Q2 earnings Wednesday with analysts expecting 97.2% revenue growth, yet the stock trades at just 23.6x forward earnings—roughly matching the S&P 500 multiple despite the chipmaker's triple-digit growth rate. The valuation anomaly stems from NVDA's recent underperformance and a consistent pattern: analysts have historically lowballed the company's results, then raised forward estimates after each earnings beat.

That dynamic sets up an unusual post-earnings scenario. Even if the stock sells off on a "buy the rumor, sell the news" reaction, the valuation denominator typically improves as Wall Street revises numbers higher. The result: NVDA often trades at a lower multiple to forward earnings after reporting, regardless of immediate price action.

The stock has lagged broader indices in recent sessions despite no fundamental deterioration in the AI infrastructure buildout driving its data center revenue. With the forward P/E already compressed to levels last seen before the generative AI boom took hold, the setup favors patient buyers willing to look past Wednesday's volatility.