Nvidia Stock NVDA Faces Earnings Test Amid Risks: New High Soon or Breakdown?
Nvidia’s rally is under test, as geopolitical uncertainty and export curbs overshadow recent highs, leaving investors cautious ahead of Q2..
Quick overview
- Nvidia's recent stock rally is facing challenges due to geopolitical uncertainty and export restrictions, leading to cautious investor sentiment ahead of earnings.
- Despite a projected revenue increase of 53.2% year-over-year for Q2, concerns over U.S.-China tensions and policy headwinds continue to weigh on Nvidia's outlook.
- The company's stock has slipped below its 20-day moving average, indicating potential further downside unless buyers can regain momentum.
- Investors are closely watching the upcoming earnings report for insights on the impact of export curbs and guidance updates.
Live NVDA Chart
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Nvidia’s rally is under test, as geopolitical uncertainty and export curbs overshadow recent highs, leaving investors cautious ahead of earnings.
Nvidia’s sharp rally to new highs has quickly faltered, weighed down by broader risk-off sentiment and persistent policy uncertainty. While late last week brought a short-lived rebound fueled by Jerome Powell’s dovish comments at Jackson Hole, investors remain cautious ahead of Wednesday’s Q2 earnings release, where the fallout from export restrictions is expected to feature prominently.
Policy Headwinds and China Exposure
Even after striking a 15% revenue-sharing deal with the Trump administration to resume sales of its H20 chip in China, the drag from export curbs will be visible in this week’s results. Back in May, Nvidia warned it could lose as much as $8 billion from China restrictions, a risk that continues to weigh heavily on sentiment.
From Record Highs to Sharp Reversal
In mid-August, optimism around U.S. chip incentives and speculation about looser restrictions on shipments to China propelled Nvidia’s stock to a record $183.97. The rally coincided with a high-profile meeting between President Trump and CEO Jensen Huang, where topics reportedly included corporate taxes, trade, and domestic chip manufacturing. Apple’s subsequent $100 billion U.S. manufacturing pledge added fuel to the bullish tone.
But the optimism faded quickly. Shares dropped more than 5% within days, sliding back under $170, as concerns resurfaced over U.S.-China tensions and uncertainty around next-generation chip approvals. Reports of a potential “B30A” processor designed specifically for China only deepened speculation and confusion, underscoring Nvidia’s vulnerability to shifting geopolitical winds.
Nvidia’s Fiscal Second Quarter Outlook
Revenue Growth:
- Projected revenue for the fiscal Q2 stands at $46.03 billion, reflecting a 53.2% year-over-year increase.
- This surge highlights Nvidia’s strong demand environment, driven by chips and robust data center sales.
Earnings Expansion:
- Earnings per share (EPS) are expected at $1.00, compared to $0.68 in the same quarter last year.
- This represents a 47.1% year-over-year jump, underscoring continued profitability momentum.
Earnings Surprise History:
- Over the last four quarters, Nvidia has delivered an average earnings surprise of +3.9%.
- This track record suggests the company may once again outperform expectations in the upcoming fiscal Q2 report.
Market Implications
- Consistently strong revenue and EPS growth, combined with a history of upside surprises, sets a positive tone ahead of the results.
- However, investor focus will remain on export restrictions and guidance updates, which could weigh on sentiment despite strong headline numbers.
Technical Signals Point to Caution – Buyers Need to Push Above the 20 SMA
On the charts, Nvidia has slipped below its 20-day simple moving average (SMA), a level that had provided reliable support since May but now acts as resistance. Unless buyers reclaim this threshold soon, momentum signals suggest further downside could follow, with the stock at risk of retesting $153, a key level from earlier cycle highs.
Market Outlook
With earnings just days away, the focus will be on how much of the export hit has been absorbed and whether the recent revenue-sharing arrangement softens the blow. For now, however, Nvidia’s outlook remains clouded by policy uncertainty, Chinese demand risks, and technical weakness, leaving the stock exposed to heightened volatility in the near term.
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