Nvidia Guided to $91 Billion. Wall Street Penciled In $92 Billion.

Nvidia(NASDAQ:NVDA) reports results for its fiscal 2027 second quarter (the period ended July 26) next Wednesday, Aug. 26. The company's own guidance, issued back in May, calls for revenue of $91.0 billion, plus or minus 2%.

Wall Street's average estimate sits near $91.9 billion, based on the 42 analyst estimates compiled by Yahoo! Finance, with adjusted earnings pegged near $2.08 per share. That's a gap of about $1 billion on a $91 billion base.

And I think the small size of that gap is the most interesting number in the whole setup.

Image source: Nvidia.

A $1 billion gap

Nvidia's plus-or-minus 2% puts the guide's ceiling near $92.8 billion and its floor near $89.2 billion.

Wall Street's $91.9 billion lands inside that range, about 1% above the midpoint. Analysts, in effect, are projecting a beat so modest that Nvidia's own outlook already contains it. For a stock that has spent three years defined by blowout quarters, that's an unusually quiet setup.

Either number still means staggering growth, to be clear.

The year-ago quarter brought in $46.7 billion, so the guide's midpoint implies revenue close to doubling year over year. The comparison is fair, too: China data center compute revenue was essentially absent from that year-ago quarter, just as the current outlook assumes.

Nvidia keeps clearing its own bar

Recent history suggests the quiet setup is too quiet.

In May, Nvidia reported $81.6 billion of fiscal first-quarter revenue -- about $2 billion above the top of the $78.0 billion, plus-or-minus-2%, range it had guided to three months earlier. Growth ran 85% year over year and 20% sequentially, with data center revenue climbing 92% to $75.2 billion.

But the pattern holds on the bottom line, too. Nvidia's adjusted earnings per share have topped analysts' estimates by 3% to 6% in each of the past four quarters, and analysts have been nudging this quarter's numbers higher into the report -- five upward revisions over the past month, and none down, per Yahoo! Finance.

A repeat of last quarter's outperformance would put revenue near $95 billion, well above both numbers in the headline. Of course, nothing guarantees a repeat.

Zero from China, and a 75% margin

What Nvidia builds into the guide matters more than the headline figure.

The company said it is not assuming any data center compute revenue from China in its outlook -- a stance now in its second year, since the U.S. began requiring a license for the H20 chips Nvidia sold into China in April 2025. Any licensed China revenue that does arrive lands on top of the guide, not inside it.

Gross margin guidance sits at 74.9% on a GAAP basis and 75% non-GAAP (adjusted), each plus or minus 50 basis points, essentially flat with the first quarter.

That number could matter more than revenue. A company doubling its sales while holding a 75% gross margin is making an aggressive statement about pricing power, and a slip there could be a bigger warning than a small revenue miss.

The guide also embeds a slowdown in sequential dollars. The midpoint asks for about $9 billion of new revenue versus the first quarter, which had itself added about $13.5 billion versus the one before it. In growth terms, that's a step down to about 11% sequentially from 20%. Whether that's caution or an actual step-down in the pace of the artificial intelligence build-out is what this report should settle.

So the stakes are narrower than the headline numbers suggest.

Shares of the world's most valuable company ($5.3 trillion, for now) sit near $220 as of this writing, about 7% shy of the 52-week high of $236.54. That price is about 34 times earnings (the company earned $6.53 per share over the past 12 months). Swap in the next 12 months' projected earnings, and the figure drops to about 22.

The distance between those two multiples is the growth analysts expect from here. And the market has already paid for it.

That valuation, I'd argue, describes a market that believes the guide but expects little beyond it. Nvidia's recent record says the bar is beatable. It cleared the top of its guided range last quarter and has topped analysts' per-share estimates four quarters running.

So the risk worth watching isn't the $1 billion between Nvidia's number and Wall Street's. It's the margin line, and the first quarter in which the usual outperformance doesn't show up.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.