Nvidia Poised for 'Monster Beat' as Earnings Loom

Nvidia is set to report its second-quarter earnings after market close on Wednesday. Despite concerns around circular financing, inference market share, and rising memory costs, Cantor Fitzgerald analyst C.J. Muse expects a 'monster beat' from the chipmaker.

Muse noted that many hedge funds and long-only investors remain underweight or use Nvidia as a funding short, which could support the stock's performance. He also emphasized that the earnings reaction may depend less on quarterly numbers and more on CEO Jensen Huang's comments on competitive position, balance sheet, and broader AI ecosystem.

Muse highlighted three potential catalysts to watch for during the earnings call: a specific 2027 data-center revenue target, more detail on Nvidia's support for neocloud providers, and its investments in open-source AI models. He expects Huang to focus on 'at least one' of these areas.

The analyst believes that Nvidia's valuation remains attractive, with the stock trading at roughly 12 times forward earnings based on his estimates. Muse predicts Nvidia will generate between $16 and $17 in earnings per share next year.