Key Stats for NVIDIA Stock
- Current Price: $223.96
- Target Price (Mid): ~$604
- Street Target: ~$303
- Potential Total Return: ~170%
- Annualized IRR: ~25% / year
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What Happened?
NVIDIA (NVDA) walks into its August 26 earnings report in a position it has not held all year: climbing into the print rather than sliding into it. Shares closed at $223.96 on August 7, up 2.27% on the session and riding a multi-day win streak that pulled the stock back within reach of its $236.54 fifty-two-week high. The lift has a name attached to it. On August 4, Elon Musk posted that SpaceX has committed to using NVIDIA GPUs exclusively “because they are the best,” then told investors on SpaceX’s earnings call that the company would build its AI systems around NVIDIA’s Vera Rubin architecture on the ground and, eventually, in orbit.
That is the setup, and it cuts both ways. A stock that rallies into a report has already priced in some good news, which raises the bar for what the print delivers. NVIDIA has guided Q2 revenue to around $91 billion, and the market wants proof that the demand everyone keeps celebrating is still accelerating, not just holding.
The $91 Billion Bar and the Guide Behind It
NVIDIA told investors to expect around $91 billion in revenue for the quarter that ended July 26. Last quarter, the company posted record revenue of $81.6 billion, up 85% year over year, and beat the Street by roughly 3%. Hitting guidance again means sequential growth above 11% on a base that is already the largest in its history.
A beat is close to the baseline expectation now, after five straight quarters of revenue beats. The reaction tells the more useful story. Even the record Q1 print drew a muted response: shares fell 1.77% the session after the May 20 report. So a headline beat alone will not move the stock. What matters is the guide for the October quarter and whether management signals demand is still climbing. Consensus models FY2027 revenue around $394 billion, up from the $215.9 billion NVIDIA reported for FY2026, so the call’s real reference point is that forward trajectory, not the $91 billion itself.
Gross margin deserves equal weight. NVIDIA guided margin to around 75%, and it has held above 70% throughout the Blackwell ramp. Any slip toward the low 70s as Vera Rubin spins up would signal the next transition costs more than the last one did.
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Why the Musk Deal Raises the Stakes Rather Than Settling Them
Musk’s commitment matters because SpaceX is becoming one of the largest private buyers of AI compute, with plans to reach over 2 gigawatts of capacity by the end of 2026 and 10 gigawatts by the end of 2027, all built on NVIDIA’s Vera Rubin NVL72 racks. It is a demand signal worth taking seriously, but it is a stated commitment made on SpaceX’s own earnings call, not a booked NVIDIA order with a dollar figure attached. SpaceX shares fell sharply the next session, closing down roughly 14% on August 5 as its own $18.4 billion capital-spending surge unsettled investors, a reminder that the buyer’s enthusiasm and the buyer’s economics are not the same thing.
The commitment lands right as NVIDIA prepares to stand Vera Rubin up commercially, and that timing is what makes it relevant to August 26. At the Bank of America Global Technology Conference on June 4, Colette Kress, Executive Vice President and CFO, confirmed the platform “is in full production” and “ready for Q3,” adding that NVIDIA already carries “about $124 billion of commitments” across its supply chain to meet the ramp. When the largest new orbital-and-terrestrial compute buyer commits to that exact platform weeks before it ships, it raises the September-quarter stakes rather than settling them: the demand is now visible, but unproven in reported revenue.
That is also why the bear case sharpens here. Michael Burry, the investor who called the 2008 housing crash, has publicly put a roughly $250 billion figure on what he argues is overstated demand across the AI buildout, a bear estimate rather than a reported number. When customers commit to years of capacity in advance, the question shifts from whether demand exists today to whether it holds if the return on that spending disappoints. NVIDIA trades at 22.43x next twelve months P/E, a premium that leaves little room for a soft guide, though it sits below AMD at 43.52x and Broadcom at 27.14x. That relative discount is defensible given NVIDIA’s 74.1% trailing gross margin and its position as the reference architecture the rest of the industry designs around.
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TIKR Advanced Model Analysis
- Current Price: $223.96
- Target Price (Mid): ~$604
- Potential Total Return: ~170%
- Annualized IRR: ~25% / year
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Using the TIKR mid-case, realized January 31, 2031, the model values NVDA at around $604, a total return of roughly 170% over about 4.5 years, and an annualized IRR of around 25%. That sits well above the Street’s mean target of around $303 because the two answer different questions: the Street models about 12 months, while the TIKR case holds through the full Vera Rubin cycle.
The two revenue growth drivers are continued hyperscaler capital spending and the Vera Rubin ramp, which Kress placed in full production for Q3, reaching enterprise, sovereign, and AI-cloud customers. That AI-cloud group matters because Kress disclosed it now runs roughly even with hyperscalers at about half of data center revenue and is likely the faster-growing half. The margin driver is data center operating leverage holding a net income margin of around 54% in the mid-case. The primary risk is specific to this setup: with the stock rallying into the print, a merely in-line October guide could trigger a sharp de-rating, the same pattern that sent shares down after the last two beats.
The upside case: agentic compute demand stays vertical, as Kress described it, and Vera Rubin ramps on schedule, pushing revenue growth and margins toward the high end of the model’s range and the target well above $604. The downside case: hyperscaler spending cools, or custom silicon takes share, holding growth to the low end and leaving a return well short of the mid-case, though still positive from current levels.
Conclusion
The number that decides August 26 is not the revenue beat, which the Street already expects. It is the October-quarter guide and the gross margin as Vera Rubin ramps. A guide comfortably above the current ~$103 billion consensus for fiscal Q3, paired with a margin held near 75%, would confirm the demand Musk just committed to is real and accelerating. A guide that merely meets expectations, or any margin slip toward the low 70s, hands the bears their opening at a valuation with no cushion.
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Should You Invest in NVIDIA?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
