Nvidia Earnings: Watch This Key Metric for a Buy Signal

Nvidia's upcoming second-quarter earnings report on August 26 has Wall Street abuzz. As the world's most valuable company, investors will be watching closely for any signs of trouble or a potential AI boom bubble.

The consensus expects Nvidia to report its fastest revenue growth in nearly two years, with a 97.2% increase to $92.2 billion and adjusted earnings per share essentially doubling from $1.05 to $2.09.

However, rather than focusing on the top-and-bottom-line results or guidance, investors should pay attention to the change in consensus EPS forecast following the report. Historically, Wall Street analysts have consistently raised estimates for Nvidia even as the stock has pulled back post-earnings.

If Nvidia gets another bump in its EPS forecast, the stock is likely to get cheaper on a forward basis, sending a clear buy signal for long-term investors.