NVIDIA stock poised for a breakout? The upcoming earnings release could provide a new boost

• NVIDIA's first-quarter results could be better than expected • Several indications of continued strong demand for AI chips

• Strong long-term revenue generators in sight

On May 28, NVIDIA will present its figures for the first quarter of its 2026 fiscal year – and could deliver a positive surprise. According to "The Motley Fool," numerous indicators point to NVIDIA once again beating expectations. In its guidance, the company anticipated revenue growth to approximately $43 billion – 65 percent more than the previous year. This would also be an increase compared to the previous quarter: In the fourth quarter of fiscal year 2025, NVIDIA generated revenue of $39.3 billion . The business with chips for AI data centers, which is the company's most important growth driver, is likely to remain crucial: In the past fiscal year 2025 alone, this area accounted for 88 percent of total revenue. Recently , concerns have grown that AI spending by large companies in this area may have declined . However, according to "The Motley Fool," these concerns are likely to prove unfounded.

Despite strong quarterly figures, NVIDIA shares have lost 13.14 percent of their value on the US NASDAQ stock exchange so far this year (as of the closing price on May 9, 2025). However, the reasons for this are not operational weaknesses – NVIDIA has consistently beaten expectations in recent quarters – but geopolitical uncertainties such as US tariffs, export restrictions, and concerns about a decline in AI spending by major customers. However, these concerns appear increasingly exaggerated. For example, Kevin Miller, Amazon's Vice President of Global Data Centers, told CNBC in April that he did not see any significant change in customer demand for data centers . "We continue to see very strong demand, and we look both at the next few years and the longer term and see the numbers only going up," Miller said. Josh Parker of NVIDIA, which manufactures the high-end processors used in these AI data centers, also confirmed this to the US broadcaster: "We have not seen a setback," said the Senior Director of Corporate Sustainability.

"The Motley Fool" shares this view, writing, citing statements from several tech companies, that demand for AI chips for data centers remains high. For example, Facebook parent company Meta announced in its annual financial statement presentation that it intends to invest $64 billion to $72 billion in new data centers this year – a portion of which is likely to go toward NVIDIA hardware. According to the news site, Alphabet and Oracle also plan to heavily rely on NVIDIA's latest Blackwell processors for their cloud services. The company is therefore likely to continue to benefit from the billions of dollars the tech giants are spending to upgrade their AI infrastructure. Overall, leading US tech companies plan to invest more than $300 billion in data centers this year – a huge potential opportunity for NVIDIA and an indicator that investors' fears of a collapse in AI infrastructure spending are likely exaggerated.

In addition, NVIDIA may have benefited from early chip purchases from China in the most recent quarter, resulting in a sales boost. As the business magazine Nikkei Asia reports, companies such as ByteDance , Alibaba , and Tencent , fearing new US export restrictions , ordered NVIDIA H20 chips worth a total of more than $12 billion before they came into effect. According to "The Information," these tech giants together secured around one million H20 chips—almost a full year's supply. While NVIDIA expects billions in losses due to export restrictions to China , the huge advance orders could potentially more than offset this effect in the first quarter.

According to "The Motley Fool," NVIDIA's participation in the $500 billion Stargate project, which is being led by OpenAI and SoftBank , will also be particularly exciting for the future. NVIDIA is expected to supply around 400,000 AI chips for the first of these centers. In the long term, this collaboration could secure billions in revenue for the chip giant.

The market data thus speaks for itself: Demand for AI computing power is booming – and NVIDIA is ideally positioned as a key provider. Should the company once again exceed earnings expectations on May 28 and issue an optimistic forecast, this could trigger a new share price surge, according to The Motley Fool, and the recent weak price performance could prove to be only a temporary dip. "Buying NVIDIA stock ahead of the release of its next earnings report could prove to be a smart move, considering it is currently trading at an attractive 25 times forward earnings," the news site writes. Whether it is right remains to be seen in a few weeks.

Editorial team finanzen.net

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