Nvidia Earnings Could Trigger a Chilling Reality Check For $1 Trillion AI Boom, Says Analyst: 'Biggest Thing I Am Watching...' (UPDATED)
Ananya GairolaTue, August 25, 2026 at 3:10 PM GMT+3 4 min read
Editor's Note: The story has been refreshed with the latest market price action and a revised headline.
Nvidia Corp.'s (NASDAQ:NVDA) fiscal second-quarter results could offer the clearest indication yet of whether the massive AI infrastructure spending cycle is still accelerating or nearing a peak.
Nvidia Earnings Put AI Infrastructure Boom to the Test
Nvidia is set to report results Wednesday after the bell, with Wall Street expecting roughly $92 billion in revenue, while the company has guided to $91 billion, plus or minus 2%.
Daniel Newman, CEO of The Futurum Group, told Benzinga that Nvidia is the "cleanest test" of whether AI infrastructure demand has actually peaked.
Newman expects revenue could reach $94 billion to $95 billion, potentially exceeding Nvidia's guidance, with October-quarter revenue potentially climbing toward $107 billion to $108 billion and eventually topping $110 billion.
If Nvidia continues delivering accelerating revenue while keeping gross margins in the mid-70% range, Newman said it would be difficult to argue that the underlying compute cycle is already rolling over.
Nvidia Hyperscaler Growth Faces Its Next Big Test
Beyond the headline revenue number, Newman said, "The biggest thing I am watching beyond the headline beat is the Hyperscale versus ACIE split."
He said Nvidia's decision to break out Data Center demand between major cloud and internet companies and its broader AI Cloud, Industrial and Enterprise customer base gives investors a clearer view of whether AI demand is expanding beyond the industry's biggest buyers.
Hyperscalers such as Microsoft Corp. (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Meta Platforms Inc. (NASDAQ:META) have driven much of the AI infrastructure boom.
U.S. hyperscalers are expected to spend roughly $916 billion on capital expenditures over the next 12 months, with consensus estimates projecting that figure to rise to nearly $1.2 trillion the year after.
Newman believes the next phase could become more durable if ACIE growth accelerates rapidly, signaling that enterprises, industrial companies, sovereign customers and neoclouds are taking on more AI compute demand.
Strong Nvidia Earnings May Not Mean Higher NVDA Stock
Still, Newman cautioned that an earnings beat alone may not send Nvidia shares higher.
With expectations already elevated, investors could punish the stock if Nvidia's results or forward guidance fail to exceed what has already been priced in.
"I have very little confidence in predicting whether the stock will be up or down the next morning," Newman said, while maintaining that Nvidia's longer-term earnings trajectory remains the more important factor.
Nvidia shares have declined following five of the company's past six earnings reports, with the last earnings-related move of 10% or more occurring in February 2024
Newman sees a potential path toward more than $15 in calendar 2027 EPS and roughly $20 in 2028, meaning continued earnings growth could drive Nvidia shares without requiring another major expansion in its valuation.
Nvidia Earnings Estimates Put AI Demand In Focus
In May, Nvidia reported first-quarter revenue of $81.615 billion, an 85% increase year over year, topping Wall Street's $78.796 billion estimate.
The company guided for second-quarter revenue of $89.18 billion to $92.82 billion, above the Street's $86.62 billion forecast at the time.
For the latest quarter, Wall Street expects Nvidia to report $2.07 in adjusted EPS on $91.91 billion in revenue, up from $1.04 in adjusted EPS and $46.74 billion in revenue a year earlier.
The estimates put the spotlight on whether AI demand remains strong enough to support Nvidia's lofty growth expectations.
According to Benzinga Pro data, options markets are pricing in a 5.35% move for Nvidia shares following the earnings report.
While that is the smallest implied move among the companies on the list, the stakes remain significant: Nvidia has a market capitalization of about $5.26 trillion, implying roughly $282 billion in market value could be at stake.
Price Action: Nvidia shares closed Monday at $208.48, down 2.91%. The stock was trading 1.22% higher at $211.03 in premarket trading, according to Benzinga Pro.
According to Benzinga Edge Rankings, Nvidia ranks in the 99th percentile for growth and continues to post positive short-, medium- and long-term price trend ratings.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
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This article Nvidia Earnings Could Trigger a Chilling Reality Check For $1 Trillion AI Boom, Says Analyst: 'Biggest Thing I Am Watching...' (UPDATED) originally appeared on Benzinga.com
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