Tom Lee Says Nvidia Just Broke Wall Street's Most Unusual Pattern

Nvidia (NVDA) jumped 8.74% on August 27 after a record quarter. Fundstrat’s Tom Lee says the chipmaker almost never rises on good earnings.

Lee calls the reaction proof that the market is healthy. However, the gains only lasted one day, and Nvidia fell 4.57% on Friday to $217.55.

A Pattern Nvidia Rarely Breaks

Nvidia has beaten Wall Street estimates for years. The stock still fell after each of its last four reports. It went into this one cold, and shares slid seven sessions in a row from August 14 to August 24, dropping from $225.30 to $208.48.

Then the numbers landed, and Nvidia’s post-earnings reversal carried the stock to $227.98, adding roughly $440 billion in market value in one day.

The quarter was not close. Revenue hit $96.2 billion, up 106% from a year ago. Nvidia guided the current quarter to $108 billion.

Why the Rest of the AI Trade Lagged

Lee thinks it was a funding problem. Investors who owned too little Nvidia had to sell something else to buy it.

Software went the other way, with Salesforce climbing 22.58% on its own results, and effectively becoming one of several stocks that outgained Nvidia that day.

Lee also pointed at the price-to-earnings (PE) ratio. Nvidia trades at 27.5 times past earnings, but only 18 times expected earnings. Estimates are climbing faster than the stock.

“The thing that stands out is Nvidia’s multiple is still very low. So, they’ve got these huge revisions. The stock hasn’t kept up. Now the PE keeps contracting,” Tom Lee, Fundstrat managing partner and head of research, speaking on CNBC.

However, not everyone is convinced. Jay Goldberg of Seaport Research Partners holds the only sell rating on the stock. He argues the sold-out supply constraint caps the upside, because Nvidia cannot ship chips it has already promised.

Lee flagged one more risk. Opposition to new data centers is turning into an election issue, and some Republican governors now back a pause.

The snowballing opposition to data centers in communities across the U.S. has transformed the midterm election landscape, thrown a wrench into the plans of the world's richest companies and brought perhaps the industry's biggest booster, President Trump, to its defense.…

— PBS News (@NewsHour) August 28, 2026

The pattern broke on Thursday. By Friday it had closed again, with about $250 billion of the gain gone.