Nvidia (NVDA +2.93%) investors haven't had the success they're used to in 2026. Over the past three years, the stock easily crushed the market in the first half of the year, but that's not the case in 2026. So far in 2026, Nvidia has lost to the market, as measured by the S&P 500. Additionally, it has barely made investors any money, only rising about 2% for the year while the S&P 500 is up around 7%.
That's a disappointing run to date, but I think Aug. 26 could be when Nvidia turns it around. That's when it reports earnings for the second quarter of fiscal year 2027, and it could be the catalyst this stock needs to skyrocket.
Image source: Nvidia.
Nvidia consistently exceeds expectations
Nvidia is thriving from the AI data center build-out, as it supplies GPUs and other infrastructure and software to support them. Nvidia's GPUs are the gold standard in AI computing, and nearly every company in the AI realm runs at least part of its workloads on Nvidia hardware. Demand for Nvidia's products continues to ramp up. This is evidenced by AI hyperscalers continuing to raise their spending outlooks for 2026 and hinting that spending in 2027 will be even higher. That bodes well for Nvidia's future growth and reassures investors that 2026 will not be the end of the trend.
NASDAQ: NVDA
Key Data Points
For the second quarter of fiscal year 2027 (ending in late July), Wall Street analysts expect an impressive 96% growth rate. Nvidia has a strong track record of exceeding expectations, so I wouldn't be surprised if its revenue growth rate returns to the triple-digit range. That would make headlines, but what investors will really be focused on is its Q3 guidance. Right now, analysts estimate 81% revenue growth for Q3. If Nvidia projects something in the 90% range again, the stock should see a quick rise, as none of that is currently priced in.
Nvidia trades at 21.1 times forward earnings, the same multiple as the S&P 500.
NVDA PE Ratio (Forward) data by YCharts
This is the market communicating that if Nvidia hits expectations, it's going to price it like a market-average stock. However, investors know that Nvidia consistently exceeds expectations and is poised for further growth next year, driven by AI hyperscaler guidance.
I think this sets the stage for an end-of-the-year rally in Nvidia's stock, and it could all kick-start in late August. If you've missed out on Nvidia's stock so far, now is the perfect time to load up on shares, as I doubt it will stay this cheap for much longer.
