What happened

It's Tuesday afternoon -- still roughly 28 hours to go before semiconductor giant Nvidia (NVDA -1.99%) reports fiscal second-quarter 2023 earnings. But even before the news has arrived, Nvidia stock is heading higher today.

After rising as much as 2.5% earlier in the day, Nvidia shares are still hanging onto half their gains as of 12:45 p.m. ET -- up 1.3%.

So what

That's actually a bit surprising, seeing as Nvidia already said the earnings news isn't going to be great. If you recall, about two weeks ago Nvidia released a preliminary report on Q2 earnings.

In that report, management warned that its Q2 revenue, which it had previously predicted would amount to $8.1 billion or so, will actually come in closer to $6.7 billion, largely because of a sequential decline in chips sold for video gaming purposes, and slower-than-expected sales of server chips for data centers. Gross profit margin on revenue will also be significantly weaker than investors had been led to expect, coming in closer to 43.7% than to the 65.1% that Nvidia had previously hoped to achieve.  

Although Nvidia has taken steps to mitigate the losses, and its operating costs will be slightly smaller than anticipated, the net result of all the above is still probably going to come as a disappointment to investors.

Now what

So why is Nvidia stock up today? That's a great question, but I suspect the answer may be as simple as: bottom-fishing.

Take a look at that chart above again. Since 2022 began, Nvidia stock has been 43% on sale. For that matter, the stock is down nearly 10% over just the past week. Nvidia's sales and earnings tomorrow may not be all that investors had hoped to see -- analysts are forecasting per-share earnings of as little as $0.20 per share, down 79% year over year. But one look at the stock chart is all it takes to tell you that a lot of bad news has already been baked into Nvidia stock's price.  

Granted, it's possible not enough bad news has been baked in. But I have to say that, at a P/E ratio of 45 today, and with analysts still forecasting long-term earnings growth rates of 22.5% for Nvidia -- so a 2.0 PEG ratio -- the stock is finally starting to approach a reasonable valuation. If Nvidia reports anything resembling an earnings "beat" tomorrow -- and follows that up with something other than abysmal guidance for the rest of the year, there's even a possibility Nvidia stock could pop after earnings.