Nvidia's Upcoming Earnings: Key Metrics to Monitor

Nvidia's earnings report due today could significantly impact its stock price. Investors are keenly awaiting updates on EPS and GAAP gross margin as these will signal its financial health and future outlook amid rising competition in the AI sector.

Date: 28-05-2025

AI Rating: 7

Nvidia has become a central player in the AI market and is poised to report its fiscal 2026 first-quarter results. Investors are primarily focused on two crucial metrics: earnings per share (EPS) and gross margin.

Earnings Per Share (EPS): Nvidia has a strong track record, beating analysts' EPS forecasts for nine consecutive quarters. This consistency indicates robust underlying demand and effective cost management, making it a key metric for investors concerned about profitability.

Gross Margin: While Nvidia's gross margins peaked at 78.4% during the fiscal 2025 first quarter, recent trends show a decline to an estimated 70.6% for Q1 2026. This downward trajectory of gross margins is concerning as it could indicate an erosion of pricing power due to increasing competition in the AI market. The ability to maintain high gross margins is critical for sustaining profitability, especially as rival firms develop their own AI chips.

If Nvidia can maintain or improve its gross margin in the coming quarters, it may bolster investor confidence and potentially support stock prices. However, continued declines could raise red flags about its ability to compete effectively in a rapidly evolving tech landscape, especially as core clients begin developing their own competitive solutions.

Overall, Nvidia's ability to deliver strong EPS coupled with a stable or rising gross margin will significantly influence its stock performance in the near term. The market seems to watch closely for these outcomes, as they will reflect Nvidia's operational health amidst rising competition.

Stocks: NVDA