This Nvidia earnings fact will frustrate you

Key Points:

• Nvidia's stock has often fallen after strong earnings reports, with shares declining in six of the past eight quarters, including the last four, despite positive results.
• Market expectations are high for Nvidia's upcoming earnings, anticipating strong performance and bullish commentary from CEO Jensen Huang, with minimal downside risk due to the company's growing AI investment portfolio.
• UBS analyst Tim Arcuri expects investors to gain confidence in Nvidia's path to $15+ EPS in 2027 and $20 in 2028, which could support continued stock growth, although recent quarters show that high expectations have been challenging to meet.
• HSBC analyst Frank Lee suggests that the next major stock re-rating will depend less on earnings and product roadmaps and more on Nvidia's role as a leading contributor to open-source AI, particularly in small language models (SLMs).
• The rise of open-source SLMs could expand Nvidia's total addressable market by lowering barriers for enterprise inference, enabling growth beyond elite labs to millions of developers and sovereign nations, potentially driving significant earnings upside.