Ahead of Nvidia’s “Make-or-Break” Q2 Earnings, Here's What Analysts Have to Say

TradingKey - Nvidia (NVDA), the leader of the artificial intelligence wave, is about to release its second-quarter 2025 earnings (Q2 FY2026), a report widely regarded as “the most important earnings report in the market.” Nvidia’s results will serve as a litmus test for whether the AI-driven demand and trading frenzy are truly justified by fundamentals.

According to TradingKey’s consensus data, analysts expect:

• Revenue: $46.0 billion, up 53% year-over-year
• EPS: $1.01, up 51% YoY

Both key metrics surpassing 50% growth underscore that AI demand remains on a strong growth trajectory.

However, the pace of growth has clearly slowed from its earlier explosive levels — when Q2 2024 saw 122% revenue growth and 151% EPS growth. This deceleration stems from a mix of factors: natural maturation, U.S. export restrictions on China, and production constraints on the Blackwell platform.

Yet Evercore ISI analysts believe Nvidia’s growth may bottom out at 50%, which could attract momentum investors and support multiple expansion.

Demand from Key Customers Remains Strong

On the front-end demand side, core clients — including Microsoft, Amazon, and Google — continue to expand capital expenditures to build out AI infrastructure.

Wedbush analyst Matt Bryson said that announced hyperscale spending increases will largely go toward building AI capacity — and much of it will ultimately flow to Nvidia.

Supply Chain Confirms Acceleration

On the supply side, the deployment of GPU products into servers designed and manufactured by ODMs (original design manufacturers) is progressing. Companies like Foxconn are expanding capacity and performance, indirectly confirming the accelerating realization of upstream GPU shipments.

KeyBanc Capital Markets noted that GB200 rack manufacturing yields are steadily improving — now expected to reach 85% — and that rack shipments could hit 15,000–17,000 units in Q4, with full-year Blackwell rack shipments reaching 30,000, exceeding the prior estimate of 25,000.

Baird observed that GB200 shipments accelerated in July, and this momentum is expected to continue into next year. The upcoming GB300 is expected to deliver a major performance upgrade.

Risks to Watch

Stifel cautioned that sustained hyperscale cloud spending, continued supply constraints in China, and potential margin pressure from early GB300 ramp-up could test the durability of Nvidia’s growth.

Despite being released from U.S. export restrictions, Nvidia’s China business still faces dual headwinds:

• The Trump administration’s demand for 15% of China's sales revenue
• Chinese government guidance urging domestic firms to avoid using Nvidia chips

Morgan Stanley analysts said that due to significant uncertainty around China sales, Nvidia’s forward guidance may be more conservative than expected.

Leadership Still Unchallenged

Despite these challenges, Baird and Stifel analysts emphasized that Nvidia’s leadership in AI infrastructure remains “unshakable.”

Loop Capital believes AI technology is entering a new “golden wave” of AI applications, and Nvidia will remain at the forefront of the next phase, where demand could exceed expectations.

Market Sentiment: Positive, But Fragile

While analysts broadly hold positive expectations, Nikkei Asia, citing industry experts, reported that if Nvidia’s management highlights China-related uncertainties or expresses unexpected caution, the market could react with immediate selling.

Additionally, with revenue growth expected to slow, investors may react more sharply to any negative signals.

Options market data shows investors are pricing in a ±6% move in Nvidia’s stock on earnings day — slightly below the 7.7% implied volatility and 7.6% average actual move seen in the past 12 quarters.