NVDA Earnings - A Referendum on AI

NVIDIA reports earnings in 90 minutes. The stakes? A potential $320 billion market cap swing.

Wall Street expects $55 billion in revenue (up 56% YoY) and $1.25 EPS. But here's the tension: consensus already sits ABOVE NVIDIA's own guidance. And how much has NVDA been helping to fuel its own growth?

You've no doubt seen the news this week - highlights of the circular investment strategy adding to the AI boom. Every news outlet has created their own version: Jensen Huang announced $500 billion in chip orders through 2026 and NVIDIA has invested $23.7 billion across 59 AI deals since January — but many of these companies are its own customers. The problem is: When your customers need your capital to buy your product, what are you really measuring?

Three Lessons Every Finance Professional Should Watch For:

1. Is this the DOT-COM BUBBLE all over again?

Analysts are flagging concerns about "vendor financing loops" among AI players. This is the dot-com playbook replaying—remember when Cisco extended billions to telecom providers so they could buy more Cisco equipment? When capital flows in circles, you're measuring momentum, not organic demand... and momentum eventually breaks.

2. Deceleration is the HIDDEN Story

Yes, 56% growth is explosive. But NVIDIA's growth has decelerated from 262% to 122% to 94% to today's expected 56%. The question isn't IF growth slows—it's WHEN the market decides the slowdown matters.

3. Expectations already price in PERFECTION

For the stock to rally, NVDA needs to beat $55B revenue AND deliver Q4 guidance well above the $62B analysts expect. This is what happens when the multiple gets stretched so thin that any miss triggers re-rating.

The Bottom Line:

NVDA's earnings has become a referendum on the entire AI trade. Whether they crush expectations or disappoint tonight, the underlying principles remain constant:

🛞 Question circular revenue that inflates growth metrics

📉 Model the deceleration, not just the acceleration

🃏 Recognize when expectations exceed reality—before the market does

The AI boom is real. The technology is transformative. But the best finance professionals know that today's most exciting growth stories create tomorrow's most challenging valuations.

What's your prediction? Beat and raise? Or reality check? ⤵️

(Me and my portfolio are hoping for a beat... but afraid of a miss)