History Says This Is What Will Happen to Nvidia Stock After Aug. 26

Aug. 26 will be a big day for the market. It's the day Nvidia (NASDAQ: NVDA) will post its financial results for the second quarter of its fiscal year 2027, which ended on July 26. Nvidia is the most important company in the ongoing artificial intelligence (AI) revolution, given its dominance in the GPU (Graphics Processing Unit) market, the most important hardware for training AI models.

It's no surprise, then, that the investing world practically comes to a halt when it comes out with its quarterly updates. The important question for investors is whether it is still worth it to buy shares of Nvidia after the amazing run it has had in recent years. Perhaps trying to predict how the stock will move after it announces its second-quarter financial results will help us answer that question.

Image source: The Motley Fool.

It's become harder to impress the market

In the early days of the AI boom, the market rewarded Nvidia's outstanding financial results by sending the stock sharply higher after practically every quarterly update. However, things have changed, and the market has adapted. Here's how the trend has been over the past five quarterly updates for the company:

• After Nvidia posted its first-quarter 2026 results in May 2025, the stock rose about 6% on strong earnings.
• Despite a fairly strong performance, Nvidia's second-quarter 2026 update, released in August 2025, sent the stock slightly down.
• After reporting its third-quarter 2026 results in November of last year, the stock initially rose but ended up reversing course and dropping about 3%.
• Nvidia's fourth-quarter 2026 results, released in February 2026, sent the stock down roughly 5%.
• After reporting its first-quarter fiscal year 2027 results in May, Nvidia's shares once again fell.

In other words, it's been a while since Nvidia saw a huge post-earnings surge, despite a couple of beat-and-raise quarters in recent memory. The market, it seems, is already used to Nvidia's blowout quarters and isn't much impressed by them anymore. So, unless Nvidia can pull not a rabbit, but perhaps an elephant, out of its proverbial hat, don't expect cheers from the market. The reaction will likely be muted or even slightly negative after Nvidia releases its next earnings report.

What does that mean for the stock?

Nvidia's shares have gained 23% over the past 12 months, roughly in line with the S&P 500, and they have climbed 18% this year, outpacing broader equities. The lesson: Even without significant post-earnings jumps, Nvidia can deliver solid returns. And there are reasons to believe the company may continue to do so. Despite fears that AI infrastructure spending will slow, many corporations are giving the opposite signal. For instance, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) recently increased its 2026 capex guidance from $180 billion to $190 billion to a new range of $195 billion to $205 billion.

Amazon (NASDAQ: AMZN) is doing the same, going from an estimated $200 billion to a new projection of $220 billion, although, in fairness, the increase was mostly due to higher memory chip costs. Still, Amazon says it can't meet the soaring demand for its cloud services, so we may expect the company to continue spending more. That's not all. Consider what Elon Musk, CEO of Space Exploration Technologies (NASDAQ: SPCX), said during the company's second-quarter earnings conference call:

We think the Vera Rubin architecture is the best architecture. We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with Nvidia. We're exclusive to Nvidia.

All of these pieces of evidence strongly suggest that analysts' bullish predictions about AI infrastructure spending may come to pass, and Nvidia should be one of the biggest winners. Its leadership in GPUs, new efforts to tap into the rising demand for CPUs (Central Processing Units) driven by the agentic AI boom, and a wide moat from switching costs put the company in a strong position. Will Nvidia repeat its amazing performance over the past three years going forward? Almost certainly not. But the semiconductor specialist remains an excellent long-term bet to cash in on the AI revolution.

Prosper Junior Bakiny has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.