Having become the world’s first $4 trillion company in July, shares in Nvidia (NVDA) have stalled slightly of late as the market awaits the company’s second-quarter earnings.

Due out on 26 August, these will cover the three months to 31 July, and investors will be looking for the company to back up the strong performance evident in its first-quarter results when it posted better-than-expected earnings and revenue.

Revenue rose 69% in that quarterly period, from $26 billion a year earlier. Sales in the company’s data centre division, which includes AI chips and related parts, grew 73% on an annual basis to $39.1 billion, accounting for 88% of total revenue, making for a 10th straight quarter of consensus beats.

While the recent and unusual revenue sharing agreement with the US government – allowing the firm to recommence exports of H20 chips to China – came after the end of the period Nvidia is reporting on, the company may still be expected to provide some colour on the arrangement.

In its first quarter update, Nvidia wrote down $4.5 billion worth of inventory as a result of restrictions of Chinese exports. This was $1 billion less than had been flagged in April as chips set for China were repurposed. There will be hope a $8 billion hit flagged for the second quarter can also be mitigated.

The shares trade on 41.7 times 2026 EPS (earnings per share) and 30.5 times 2027 EPS based on consensus forecasts.  

Earnings have grown at a CAGR (compound annual growth rate) of 91% since 2020, on 64% compound annual growth in revenue. It is these levels of growth that Nvidia will likely need to sustain to maintain its eye-catching share price momentum in recent years. 

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