Nvidia stock faces high expectations ahead of August 26 earnings as Wall Street watches AI growth, valuation, open-source models and Nvidia's next big story. 

Updated on: Aug 22, 2026, 24:13:33 IST

Prefer HTon Google

Share via
Copy link

Nvidia is set to report its latest earnings on August 26, but Wall Street is not simply waiting to see whether the chip giant beats estimates. Investors already expect Nvidia to deliver a strong quarter and for CEO Jensen Huang to give a very positive outlook during the earnings call.

That creates a bigger challenge for the company because a strong earnings report may not be enough to push the stock much higher. Yahoo Finance reported that expectations are already running very high ahead of the results.

Nvidia stock has already been performing strongly

Nvidia shares have also been doing well ahead of the earnings report. The stock has outperformed the S&P 500 by about five percentage points over the past month, according to Yahoo Finance AlphaSpace data. That strong performance means investors have already priced in a lot of good news.

Wall Street wants a new reason to value Nvidia higher

The biggest question is what Nvidia can do beyond simply reporting strong earnings. HSBC analyst Frank Lee said Nvidia may need a new story or narrative to get another major increase in its stock valuation. Lee said earnings and Nvidia's product roadmap have become less important as reasons for investors to give the stock a higher valuation.

In simple terms, Wall Street already knows Nvidia is making a lot of money and has powerful AI chips. Investors now want to know what comes next. Lee believes one possible new story is Nvidia becoming the world's largest contributor to open-source AI. Lee said the growth of these smaller models could create a major opportunity for Nvidia.

That could allow Nvidia to sell its infrastructure to a much wider group of customers. Lee said this could expand Nvidia's total addressable market, or TAM, beyond a small number of major AI labs to millions of individual developers and sovereign nations. This could create another source of earnings growth for Nvidia.

Nvidia is already making moves beyond selling chips

Nvidia has also been taking steps that could help investors see the company as more than just a chipmaker. Earlier this month, Nvidia partnered with major financial firms including Apollo Global Management, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR.

The group is working to create independent financing platforms for AI computing infrastructure. The goal is to bring around $500 billion in private capital into AI data centers and what Nvidia calls "AI factories."

Nvidia is trying to secure every part of the AI infrastructure chain

Bank of America analyst Vivek Arya said Nvidia's strategy is becoming increasingly clear. The company wants to support the rapid expansion of AI by helping secure the different pieces needed to build AI infrastructure. Still, because investors already expect strong earnings and a bullish outlook from Huang, a simple earnings beat may not be enough to trigger another major stock rerating.

Wall Street is now looking for evidence that Nvidia can create new growth opportunities and a bigger market for its AI infrastructure. Open-source AI, smaller language models, AI financing and the expansion of data-center infrastructure are therefore becoming important parts of the Nvidia story.

Wall Street is now looking for evidence that Nvidia can create new growth opportunities and a bigger market for its AI infrastructure. Open-source AI, smaller language models, AI financing and the expansion of data-center infrastructure are therefore becoming important parts of the Nvidia story.

See Less