Nvidia stock (NVDA) edged 0.1% lower in early Wednesday trading as investors looked ahead to the chipmaker’s August 26 earnings report and weighed reports that Chinese customers may receive additional shipments of its H200 processors.
The move followed a 2.3% decline on Tuesday amid a broader selloff in semiconductor stocks.
The company’s upcoming fiscal 2027 second-quarter results remain the main focus for investors, with analysts expecting another strong performance from the leading AI chipmaker.
China sales could provide additional boost
An additional source of upside could come from Nvidia’s business in China.
Chinese authorities have allowed domestic companies ByteDance and Tencent to receive around 10,000 Nvidia H200 processors each in recent weeks, the Financial Times reported, citing people familiar with the matter.
Other Chinese companies could also receive approval for similar shipments, according to the report.
Nvidia’s potential China revenue will be closely watched when the company reports results on August 26, as investors assess the impact of restrictions and approvals on its ability to serve the Chinese market.
Morningstar also highlighted China sales as an issue to watch in Nvidia’s upcoming results.
The research firm expects the company to provide an update on sales, or non-sales, into China.
Morningstar has a $280 fair value estimate and a four-star rating on Nvidia, with a Wide economic moat rating and a Very High uncertainty rating.
Analysts expect another strong quarter
Morningstar said it is looking for another “beat-and-raise” quarter from Nvidia, pointing to strong capital expenditure trends among hyperscalers and enterprises.
The firm expects Nvidia to generate well over $300 billion in data center revenue in calendar 2026, which corresponds to fiscal 2027, and potentially more than $500 billion in fiscal 2028.
Morningstar also expects the earnings report to provide an update on the pace of Nvidia’s expansion and its product roadmap.
The firm said reports surrounding Rubin Ultra, expected in late 2027, suggest the product will still arrive but may not meet all of Nvidia’s ambitious technological targets.
Nvidia’s financing and backstopping of AI infrastructure partners is another area Morningstar plans to watch.
The firm highlighted Nvidia’s recently announced $500 billion mobilization of large financial asset managers to invest in artificial intelligence, as well as smaller arrangements involving Sharon AI and Firmus.
The firm maintained that Nvidia’s competitive position remains intact, citing its AI GPU hardware, CUDA software ecosystem, networking and interconnectivity capabilities.
Stifel expects earnings beat
Stifel also reiterated a Buy rating on Nvidia and a $282 price target ahead of the company’s fiscal 2027 second-quarter earnings report.
The firm expects Nvidia to beat estimates and raise its guidance.
Stifel said debates surrounding memory costs and competition in AI inference are more likely to show up in Nvidia’s gross margin than in demand.
Nvidia currently has a 74.15% gross profit margin, reflecting the company’s pricing power in the AI chip market.
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