Nvidia earnings face a frustrating reality

This Nvidia earnings report will be a test of investor confidence, as the stock has fallen in six of the past eight quarters, including the last four. Despite CEO Jensen Huang's bullish outlook on the call, the market expects strong numbers and sees minimal risk in Nvidia's expanding AI investment portfolio. Analysts are confident in a path to $15+ EPS in 2027E and $20 in 2028E, but Nvidia's stock has underperformed the S&P 500 by five percentage points over the past month.

HSBC's Frank Lee suggests that a new narrative could boost Nvidia's valuation, such as positioning the company as the world's largest contributor to open-source AI, which could lower barriers to enterprise inference and expand Nvidia's total addressable market.