Nvidia Earnings Preview: A $108B Guide and a Stock 22% Off Its Peak

Nvidia earnings for the quarter that ended October 25 arrive on Tuesday, November 17, and the company has already told investors what to expect: revenue of about $108 billion, plus or minus 2%. The question is whether that is enough. Nvidia's stock closed Friday at $186.64, about 22% below its record close of $239.24 on October 6, even though the business it reports on has kept growing.

In brief, the numbers say the selloff is about doubt over future spending, not a slowdown already visible in Nvidia's results. Revenue has risen for six straight quarters, guidance points higher again, and the stock trades at a lower multiple of earnings than its own five-year norm. What changed is the market's confidence that customers can keep paying, and the November 17 report is the first hard data since that confidence cracked.

Revenue has more than doubled in a year

Nvidia reported revenue of $96.2 billion for its fiscal second quarter, which ended July 26, up 106% from a year earlier and 18% from the quarter before, according to its earnings release filed with the SEC. Data center revenue, the part that sells AI chips and systems, reached $89.0 billion, up 117%. GAAP net income was $59.7 billion and gross margin was 75.0%.

The guidance for the third quarter implies revenue between $105.8 billion and $110.2 billion, with a gross margin of about 74%. It assumes no data center compute revenue from China. Nvidia has a habit of clearing its own bar: the second-quarter guide was $91.0 billion and the result came in at $96.2 billion. The Motley Fool counted that Nvidia has beaten the top of its revenue range in each of the past 12 quarters.

The stock lost more than $1 trillion of value in a month

The share price tells a different story. Nvidia peaked at a closing high of $239.24 on October 6, according to Trefis. It slid through late October with the rest of the AI trade, then fell about 9% on Thursday, November 5, to $181.64, its worst day since the DeepSeek scare of January 2025, Yahoo Finance reported. At that close the stock was 24% below its record and the company's market value was about $4.4 trillion, according to GuruFocus. Friday's 2.8% rebound left it 22% below the peak.

Nvidia issued no news of its own that day. Trefis tied the drop to post-election fears of a data center slowdown and a weak outlook from Qualcomm, and the whole chip group fell with it: the Philadelphia semiconductor index lost 12% and AMD fell about 17%, according to Trefis. We covered that session in AI Stocks Crash: Chip Index Falls 12%. Since then, a hot jobs report has pushed up the odds of a December rate hike, another weight on expensive growth stocks, as we reported in Fed Rate Hike Odds Near 79%.

Valuation looks lower on earnings, high on sales

Whether Nvidia looks like a bubble depends on which yardstick you use. On earnings, the stock is far cheaper than it was: GuruFocus put its trailing price to earnings ratio at about 23 times, against a five-year median of about 55 times. Profits have simply grown faster than the share price. On sales, it is still expensive. Trefis calculated that at the November 5 close Nvidia traded at 14.5 times its revenue over the past twelve months, compared with 3.2 times for the S&P 500.

A low earnings multiple is only comforting if the earnings last. Bubble skeptics argue that today's profits depend on a spending wave by a handful of customers that may not repeat at this scale. That is why the market is focused less on the next quarter than on what Nvidia says about 2027.

The risks sit on the balance sheet

Two numbers show how hard Nvidia is leaning into future demand. Inventory rose from $21.4 billion in January to $31.6 billion at the end of July, according to its filings. And long-term supply and capacity agreements jumped to $279 billion as of July 26 from $119 billion a quarter earlier, as reported by both The Motley Fool and CryptoBriefing from Nvidia's quarterly 10-Q. CryptoBriefing described the commitments as mainly memory components. They make sense if orders keep rising. They become obligations if they do not.

Nvidia is also helping its customers pay. In August it announced partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilize more than $500 billion of outside capital for AI infrastructure over time, subject to definitive agreements. Financing that flows back to the chip supplier is the kind of loop we examined in AI Circular Deals. Meanwhile Nvidia keeps returning cash: about $26.0 billion in buybacks and dividends last quarter, with $99.0 billion of buyback authorization left.

What the AI Bubble Index says

The AI Bubble Index read 63.9 after Friday's close, in its Normal band, up from 62.9 a week earlier. Its sentiment and attention family is the hottest part of the reading at 92.5, momentum reads 67.3 and the valuation and concentration family reads 57.9. Fragility, at 69.8, sits just above Euphoria at 66.5, while the demand gap is the coolest measure at 40.1. The dashboard shows each family day by day, and the methodology page explains how the band is set.

A 22% drawdown in the market's most important stock with the index still in its Normal band fits the picture of the past month: attention and anxiety are high, but by the index's long-run measures prices have not reached the extremes it assigns to past bubble peaks. That can change quickly in either direction.

How this compares with past tech bubbles

Sharp drops in leading stocks are common in bubbles and in healthy bull markets alike, so a drawdown alone settles little. What stands out in Nvidia's case is that profits have kept pace with the price, which is why its earnings multiple has fallen rather than risen. Our dot com bubble vs AI bubble comparison puts the two eras side by side, and the guide to how to detect market bubbles explains why sales multiples and customer concentration matter as much as earnings.