$92 Billion Nvidia Earnings Report Set to Shake Up AI Trade

Nvidia is set to report its Q2 earnings on Wednesday, and Wall Street expects record sales of nearly $92 billion, with net income expected to surge by around 95% to more than $51.5 billion.

This performance would mark the 15th consecutive quarter that Nvidia has beaten earnings estimates, with last quarter's net income growth far outpacing forecasts at an impressive 210% year-over-year increase.

Despite its strong track record, Nvidia's stock has entered a period of decline, with investors growing concerned about the risks associated with AI spending and memory-cost increases. Some traders are hedging their bets, purchasing puts that bet on a potential drop to $205-$210 from Friday's close of $214.75.

Nvidia's participation in a $500 billion AI financing plan has drawn bullish price targets, including a recent boost to $360 by HSBC's Frank Lee, who cited the company's supplier partnerships and role in open-source AI development as key factors driving growth.