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Buy Nvidia Stock Ahead of Earnings?
Nvidia (NASDAQ:NVDA) is expected to announce its Q2 2026 earnings at the end of August (January fiscal year). Analysts anticipate earnings of $1 per share, an increase from $0.68 in the same quarter last year, and revenues are projected to grow by over 50% year-over-year to $45.60 billion. This growth is likely to be fueled by the sustained strong demand for the company's GPU chips utilized in generative AI applications. Nvidia has been increasing large-scale production of its latest Blackwell AI supercomputers. These new chips, with their cutting-edge AI functionalities and premium pricing, may assist in driving revenue growth during Q2 FY'26, while also enhancing margins. Historically, NVDA stock has tended to outperform following earnings releases, having risen 60% of the time with a median one-day increase of 4.5% and a maximum observed increase of 24%.
The company holds a current market capitalization of $4.4 trillion. Over the past twelve months, revenue totaled $149 billion, and it was operationally profitable, achieving $86 billion in operating profits and a net income of $77 billion. Although much will depend on how results compare to consensus expectations, recognizing historical trends may improve your chances if you are an event-driven trader. Should you Buy Or Fear Nvidia stock?
For event-driven traders, historical trends might provide an advantage, whether by positioning prior to earnings or responding to post-release movements. That said, if you are looking for upside with less volatility than that of individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
See earnings reaction history of all stocks
NVIDIA's Historical Odds of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (although not useful if the correlation is low) is to assess the relationship between short-term and medium-term returns post earnings, identify a pair with the highest correlation, and execute the suitable trade. For instance, if 1D and 5D show the strongest correlation, a trader could position themselves 'long' for the upcoming 5 days if the 1D post-earnings return is positive. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D refers to the association between 1D post-earnings returns and subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
Occasionally, peer performance can impact post-earnings stock reactions. Indeed, the pricing-in may start before the earnings announcements are made. Here is some historical data illustrating the past post-earnings performance of NVIDIA stock compared with the stock performance of peers that reported earnings immediately before NVIDIA. For an equitable comparison, peer stock returns also reflect post-earnings one-day (1D) returns.
Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (the combination of all three, the S&P 500, S&P mid-cap, and Russell 2000), delivering strong returns for investors. Additionally, if you prefer upside with a smoother ride compared to an individual stock like NVIDIA, consider the High Quality portfolio, which has outperformed the S&P and recorded >91% returns since its inception.
