Nvidia's Stock May Fall Despite Record Revenue Growth

Nvidia is set to report its fiscal Q2 earnings on August 26, and despite expected revenue growth of nearly 97% year-over-year, investors may still be disappointed with the results.

The company's revenue guidance for Q2 stands at $91 billion, but Wall Street analysts expect it to exceed that figure by about $800 million.

Nvidia has become a victim of its own success, repeatedly beating expectations and training investors to anticipate strong performance.

This has led to a phenomenon where even extraordinary results are viewed as ordinary, causing the stock price to drop after earnings announcements.

The real number to watch is Nvidia's gross margin, which currently stands at 75%. With little room for growth, any decline in margins could be a cause for concern.