Nvidia Corporation (NASDAQ: NVDA) is set to release its earnings report on August 28th. The stock has experienced a month of pullbacks, rebounded to $130 on August 19th. The market anticipates that Nvidia might hold at this level if there are no surprises in macroeconomic data. The primary questions are whether to sell at current and wait to buy back at a lower price, or to hold Nvidia shares in anticipation of earnings exceeding expectations.

I had previously shared that analysts remain bullish on Nvidia, with an average 12-month price target of approximately $130.88 (https://stockanalysis.com/stocks/nvda/forecast/). This is slightly above the closing price of $130 on August 19th.

Financial Performance and Market Position

Nvidia has demonstrated robust financial performance, driven by its leadership in AI and data center markets. In the first quarter of fiscal 2025, Nvidia reported record revenue of $26.0 billion, up 18% from the previous quarter and 262% year-over-year. The data center segment, a key growth driver, saw revenue of $22.6 billion, up 23% from Q4 and 427% year-over-year.

Industry and Market Trends

The demand for AI and data center solutions continues to surge, positioning Nvidia favorably. Leading cloud computing companies are increasing capital expenditures to meet AI demand, which is expected to benefit Nvidia significantly. Based on recent quarterly earnings call for Amazon, Alphabet, Meta and Microsoft, prospects for Blackwell remain very good. The company's CUDA software enhances customer stickiness, ensuring sustained revenue growth from existing AI models and workloads.

Technical Analysis

The stock's rebound to $130 on August 19th is noteworthy. Technical indicators suggest that this level is critical, and the stock may consolidate here before the earnings report. If macroeconomic conditions remain stable, Nvidia's stock could hold or potentially break through this resistance, depending on the earnings outcome.

Macro-Economic Considerations

Global economic conditions, including inflation rates, interest rates, and geopolitical tensions, can impact Nvidia's stock performance. Monitoring these factors is crucial as they can influence investor sentiment and market dynamics.

My next steps

1. Hold Existing Position Until Earnings Report: Given Nvidia's strong financial performance and favorable industry trends, holding the stock until the earnings report is advisable. The potential for earnings to exceed expectations could drive the stock price higher, providing an opportunity for greater returns.

2. Evaluate Post-Earnings Performance: After the earnings report, reassess Nvidia's stock performance. If the earnings exceed expectations and the stock breaks through the resistance level, consider holding or adding to the position. Conversely, if the earnings disappoint or macroeconomic conditions deteriorate, evaluate the potential for a pullback and adjust the position accordingly.

3. Long-Term Investment Perspective: Nvidia's leadership in AI and data center markets, coupled with its strong financial performance, makes it a compelling long-term investment. I am certainly maintaining a core position in Nvidia, capitalizing on its growth potential in these high-demand sectors.

Conclusion

Nvidia's upcoming earnings report presents a critical juncture for investment decisions. Given the company's robust financial performance, favorable industry trends, and strategic market position, holding the stock until the earnings report is a prudent approach. Post-earnings, reassess the stock's performance and macroeconomic conditions to make informed decisions. Nvidia's long-term growth prospects in AI and data centers make it a valuable addition to my portfolio.