The AI boom will face a key litmus test today, with chip giant Nvidia (NVDA) slated to report earnings after the bell. The results are widely viewed as a barometer for AI demand, given that almost all the major tech firms rely on Nvidia's chips to power their data centers.
What to expect: Analysts on average have forecast Q2 EPS of $2.09, while revenue is seen rising 97% Y/Y to $92.18B. Expectations are running high, fueled by robust Blackwell demand, while investors will watch for commentary on the latest Rubin processors. "We expect another strong print and higher outlook, but believe the more important question is whether management can extend visibility through the Vera Rubin transition and reinforce confidence in the durability of growth into 2027 and beyond," William Blair analysts stated. "We think the market is positioned to be impressed by the upcoming print in the short term," SA analyst Tech Stock Pros wrote this week. "Yet we think Nvidia has a ticking time bomb on its hands in the mid-term: getting cannibalized by lower-cost solutions, i.e., custom ASICs, which is why we are framing this as the last play on Nvidia."
Spending fears: An area of concern is the broader AI splurge and uncertainty over returns. Earlier this month, Nvidia said it partnered with six Wall Street giants to mobilize over $500B of third-party capital for the buildout of AI infrastructure over time. Nvidia also announced one of its biggest AI financing commitments – a $105B backstop for a massive OpenAI (OPENAI) data center in Ohio – reviving concerns about circular financing. In addition, Nvidia customers were reportedly notified of AI server price hikes. "Passing cost increases to customers while simultaneously deploying billions into a startup with no near-term revenue tie-back is the kind of capital allocation that reads fine in a bull market, but gets picked apart in an uncertain one," SA analyst The Techie noted. Nvidia Q2 Beat Is Priced In, But I Have Questions About Their AI Investments
Options chain: Two weeks ago, Nvidia's options chain pointed to $240 as the earnings target. But after the stock's recent decline, the chain has adjusted accordingly, with bulls now concentrated at $220 to $230 and the put side meaningfully more active. The Aug. 28 options chain prices in a move of roughly ±6.1% by Friday's expiration — bracketing a post-earnings range of approximately $196 to $222. The options market is not pricing panic around Nvidia's earnings — the ±6.1% implied move is contained, and the weight of open interest remains firmly on the call side. But the chain has been meaningfully repriced since Aug. 14. The $230 call replacing the $240 call as the dominant position, the $200 put drawing record single-day volume, and the overall shift toward more two-sided positioning all reflect a market that has absorbed 10 days of selling and recalibrated.
