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Nvidia Poised for Second-Quarter Sales Beat, Upbeat Guidance, BofA Says

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Nvidia Poised for Second-Quarter Sales Beat, Upbeat Guidance, BofA Says

Nvidia (NVDA) is likely to deliver a fiscal second-quarter revenue beat and issue an upbeat guidance amid Vera Rubin shipments and "solid" cloud capital expenditure trends, BofA Securities said in a note e-mailed Monday.

The chipmaking giant is expected outperform sales expectations by $3 billion to $4 billion for its second quarter. In May, Nvidia said it anticipated revenue of $91 billion, plus or minus 2% for the quarter, while the current consensus on FactSet is for $91.91 billion.

For the ongoing three-month period, BofA forecasts Nvidia to issue a revenue outlook about 3% to 4% above consensus, or $107 billion to $108 billion, based on the company's recent guidance trend. Wall Street is looking for $103.68 billion.

The outlook factors in the start of the next-generation Vera Rubin shipments, new Vera central processing unit ramps, and "solid" cloud CapEx trends, BofA analyst Vivek Arya said in a note to clients.

Recently, Amazon.com (AMZN) increased its full-year CapEx guidance, while Meta Platforms (META) raised the lower end of its own outlook range for the metric. Microsoft (MSFT) said it anticipated CapEx in its fiscal 2027 to increase year over year, while Alphabet (GOOG, GOOGL) indicated rising artificial intelligence capital spending.

Spot rental prices of graphic processing units are still hovering around their all-time high levels, reflecting persistent robust demand for compute, and point to cloud pricing upside that could address continued return on investment concerns around Nvidia, BofA said.

The brokerage expects the tech bellwether to hold a "healthy" gross margin of around 73% to 74% over time, with limited impacts from rising memory costs.

Nvidia has likely made around $70 billion in equity investments into ecosystem partners so far, including the recent $30 billion investment in OpenAI and up to $10 billion in Anthropic, according to the note. These investments are "easily manageable," due to Nvidia's ability to generate up to $470 billion of free cash flow over the next two years. "In other words, we see no issue in (Nvidia) returning 50% of (free cash flow) to shareholders," Arya wrote.

BofA maintained its buy rating on the Nvidia stock with a $350 price objective while naming it the "top sector pick on compelling valuation."

The company's shares were down 3.1% in Monday afternoon trade. So far in 2026, the stock has jumped nearly 18%.

Nvidia is scheduled to release its latest financial results Aug. 26.

Price: $217.76, Change: $-6.20, Percent Change: -2.77%

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