How Will Nvidia Stock React To Its Upcoming Earnings?
Nvidia (NASDAQ:NVDA) is set to report its Q1 earnings toward the end of May. Consensus projects earnings of $0.89 per share, up 45% compared to last year, while revenues are estimated to grow by 65% year-over-year to $43 billion. Growth is likely to be driven by continued strong demand for the company’s GPU chips used for generative AI applications. In the previous quarter, Nvidia noted that it had ramped up large-scale production of its latest Blackwell AI supercomputers. These new chips, with their advanced AI capabilities and premium pricing, could help drive top-line growth over Q1 FY’26, (FY’25 ended Jan. 2025), while also bolstering margins. That said, investors will be watching Nvidia’s future outlook, especially amid rising uncertainty around U.S. trade policy and tariffs on key trading partners. The Trump administration is also looking at more closely regulating AI chip exports via the newly proposed AI diffusion rules, which could pose a significant risk to Nvidia’s long-term growth by limiting sales in key international markets.
Nvidia has $2.7 trillion in current market capitalization. Revenue over the last twelve months was $130 Bil, and it was operationally profitable with $81 Bil in operating profits and net income of $73 billion That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.
See earnings reaction history of all stocks
NVIDIA’s Historical Odds Of Positive Post-Earnings Return
Some observations on one-day (1D) post-earnings returns:
- There are 20 earnings data points recorded over the last five years, with 12 positive and 8 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 60% of the time.
- However, this percentage decreases to 58% if we consider data for the last 3 years instead of 5.
- Median of the 12 positive returns = 4.6%, and median of the 8 negative returns = -6.3%
Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
Sometimes, peer performance can have an influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Nvidia stock compared with the stock performance of peers that reported earnings just before Nvidia. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Nvidia, consider the High Quality portfolio.
Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates