Why August 27 Could Be a Game-Changer for Investors

Nvidia is just like the exceptional and above average protagonist who continues to beat the odds, dodges each twist of fate, and manages to walk away with happiness. Nvidia has orchestrated one of the greatest comeback acts on Wall Street this year. Since its 52-week low on April 7, the company’s stock has risen a whopping 83%. Even more remarkable about this rally is that it might not be over yet, and is considered to be just the beginning.

Its second-quarter fiscal 2026 results are scheduled to come out on August 27, and Nvidia may have more fuel for its next stage. The investors are definitely wondering whether Nvidia can post results that are strong enough to support its climb, and definitely there are a few developments that make it seem like of course Nvidia can do that.

Solid Guidance

When Nvidia announced its fiscal Q1 numbers, the board forecasted $45 billion of revenue for the quarter that just ended, which is a mind-boggling 50% year over year jump. But that projection came with one major caution. The company estimated that it would lose about $8 billion of sales because of U.S export restrictions on its H20 AI GPU, which was designed specifically to serve the Chinese market.

Those restrictions took their toll. Nvidia lost $2.5 billion in fiscal Q1 revenue and took a $4.5 billion charge. However, in a dramatic reversal, the U.S government has since issued Nvidia a license to export H20 chips to China. Although, it came with a condition that 15% of revenue from those sales will be paid to the government.

With Nvidia’s projected $8 billion in probable sales for Q2, it seems like the company may have already regained a portion of that lost revenue. With license applications beginning in mid-July, around the time the quarter ended, Nvidia’s revenues could end up coming in higher than initially anticipated.

Tailwinds & Tech Spending on an Immense Level

Even while Nvidia is going through security related issues in China, demand for its AI GPUs continues to be high. Despite being under restrictions, only the Chinese supply shortage has the power to continue to keep the H20 chip in high demand. In addition, global dynamics are also favoring Nvidia.

U.S technology titans such as Amazon, Microsoft, Meta Platforms, and Alphabet, are sharply increasing their expenditures. Their combined capital spending is now forecasted at $364 billion in 2025, which is more from the previous estimate of $325 billion. That’s a 64% increase from last year, and quicker than what was in 2024. With Nvidia holding a projected 80% of the AI chip market, this type of spending translates into an increased sales momentum. Nvidia is at the forefront of sovereign AI infrastructure, adding further scope to its long-term growth narrative.

Nvidia’s Worth From Investor’s Point

Following such a spectacular climb, investors naturally start asking if Nvidia’s stock is just too pricey. Trading at 58 times earnings, it appears quite proud next to the S&P 500 average multiple of 25. Yet the comparison is not meaningful without context. Nvidia’s bottom line is all set to jump 47% in fiscal Q2, which is more than five times the average earnings growth that is expected of S&P 500 companies.

That type of growth is why investors have been prepared to pay a premium. The valuation is not a product of hype, but Nvidia’s commanding position as the leading provider of the AI revolution. For growth-oriented investors, Nvidia still has compelling upside potential, along with strong guidance, specifically with its next results acting as the next potential catalyst.

Bottom Line

The bullish argument for Nvidia going into August 27 is strong, but it’s not risk-free. On one hand, the firm is going through strong tailwinds, the U.S cloud giants are driving demand, sovereign AI infrastructure is scaling up, and China with all its regulatory nuances is still a greedy market for AI GPUs.

Nvidia’s success in winning export licenses for its H20 chips implies that it will be able to get hold of its lost revenue, potentially giving an upside surprise in terms of guidance. On the contrary, the premium investors are paying, almost 58x earnings, which is a reminder that the stock is priced for excellence. Any stumble, whether from regulatory hurdles or supply blockages, could induce severe instability.

Nvidia’s rally so far has been inspiring, and it appears that Nvidia is all set for another higher leg post August 27. For investors who are able to digest short-term instability, Nvidia is still one of the best growth stocks to watch. If its FQ2 report amazes with the upside, the company might again demonstrate why it is the unchallenged AI leader. Nvidia is walking between justifiable enthusiasm and out of sight expectations, and investors need to determine if they’re willing to pay today for the future growth.