Should You Buy Nvidia Stock Before August 28th?

It’s been another exciting earnings season for investors as megacap tech companies have shown that the artificial intelligence (AI) train is steaming ahead.

One AI player in particular has yet to release its second quarter financial results. On August 28, semiconductor specialist Nvidia (NVDA 0.98%) will report earnings, and you can bet the bulls and bears on Wall Street will be focusing on every number the company produces.

Let’s look at what investors should be looking for and assess whether now is a good time to buy Nvidia stock.

What does Wall Street predict for Nvidia’s earnings?

Nvidia reports revenue in five categories: data center, gaming, professional viewing, automotive and original equipment manufacturing (OEM).

Every segment is connected to AI in some form or fashion, but the overwhelming majority of Nvidia’s business comes from data centers. In the first quarter of the company’s 2025 fiscal year (ended April 28), total revenue was $26 billion. Almost 87% of that, or $22.7 billion, came from the data center business.

According to consensus analyst estimates, Wall Street expects second-quarter sales to be about $28.5 billion. If Nvidia were to achieve this goal, it would represent a 111% year-over-year increase.

In the section below, I’ll detail why I think Nvidia could miss those estimates and explain some of those headwinds that could lift the important data center operation.

Image source: Getty Images.

A good proxy for Nvidia

It’s obvious that a common thread that ties together the overall fabric of megacap technology right now is AI. But at a more granular level, the integration of AI with cloud computing is a big move in the tech industry in general.

The cloud computing landscape is dominated by Amazon, Microsoftand Alphabet.

During the second quarter, each of these members of the “Magnificent Seven” revealed some interesting characteristics. Namely, each is aggressively increasing investment in capital expenditures (capex).

AMZN capital expenditure (quarterly); data by YCharts.

In Amazon’s case, the company’s big initiative is an $11 billion investment in data centers in Indiana as part of a broader push to develop its own AI-powered chips. As for Microsoft, the company hasn’t been shying away from new investments in nuclear-powered data centers as the company looks to double down on its AI infrastructure in an energy-efficient way.

During Alphabet’s second-quarter earnings call, CFO Ruth Porat said capital spending was “largely driven by investments in our technical infrastructure with the largest component being servers, followed by data centers.”

See the theme? All of Nvidia’s cohorts are investing tens of billions of dollars in data center infrastructure, and the trends in the chart above suggest it won’t be slowing down anytime soon.

Given that most of Nvidia’s revenue and profits come from data center services and the company’s sophisticated graphics processing units (GPUs), I see the growing investment patterns from others in big tech as a good proxy for what will follow for Nvidia.

Should you buy Nvidia stock before August 28?

AI emerged as the hottest ticket in tech towards the end of 2022 when OpenAI launched ChatGPT.

In the chart below, you can see how Nvidia stock has reacted following a series of earnings reports since the start of last year. The earnings report data is annotated by the purple circles with the “E” in the middle.

NVDA data by YCharts.

It’s clear that Nvidia stock has risen considerably over the past 20 months or so. More specifically, stocks rarely fell immediately after an earnings report, and when they did, the sell-off was short.

To me, this helps validate that buying Nvidia stock either before or after its latest earnings reports ended in the same result: gains.

NVDA PE Report; data by YCharts.

When it comes to valuation, Nvidia stock is less expensive today than it was a year ago on both a price-to-earnings (P/E) and price-to-free cash flow (P/FCF) basis. This compression in multiples has occurred because the company’s profits and cash flow are actually growing Faster than its sales, a sign of an incredibly healthy and strong operation.

Given the trends from its aforementioned Magnificent Seven peers, I’m cautiously optimistic that Nvidia could experience another impressive quarter. For these reasons, it might be a good idea to buy some shares now, as history suggests that Nvidia stock could be headed for further gains.

But I wouldn’t get too caught up in the exact moment. If you prefer to look at the earnings ratio first and then decide to buy the stock, you may be investing at a slightly higher valuation. Given the trends in the earnings chart, I’m confident that gains will still be on the horizon for long-term investors, whether or not they buy Nvidia stock before August 28.