Nvidia Stock Gains as Crunch Earnings Loom. Markets Are Shrugging Off Its High Bar.

Nvidia chips are the favored choice for training artificial-intelligence models. (David Paul Morris/Bloomberg)

Nvidia stock was rising on Tuesday as investors look ahead to the chip maker’s quarterly earnings.

The company’s shares were up 0.1% at $179.89 in early trading. The stock rose 1.0% on Monday. Among other semiconductor makers, Advanced Micro Devices was rising 2.4% and Broadcom was down 0.1% in premarket trading.

Nvidia reports earnings on Wednesday after the market close. Expectations are high after an earnings season when major technology companies doubled down on AI investment.

“At current valuation levels for the stock, Nvidia will need to beat earnings consensus and then provide guidance that’s higher in order to keep the stock elevated,” wrote Dave Sekera, chief U.S. market strategist at Morningstar. “The market will want details on the status of H20 chips that were being sold to China.”

While Nvidia has received permission from Washington to sell its H20 hardware in China—so long as it gives 15% of the revenue to the U.S. government—authorities in Beijing have reportedly discouraged Chinese companies from using the chips. Chinese AI firm DeepSeek last week released the latest version of its large language model, which it said was adapted for next-generation domestic chips.

“Either way, from a valuation point of view, we’re currently forecasting $4.54 in earnings this year and $6.42 per share next year, so that means [Nvidia] stock is trading at 38 times fiscal 2026 earnings and 28 times fiscal 2027 earnings,” Sekera wrote. “Those are some pretty lofty multiples, so Nvidia will need to put up the numbers to justify that.”

With Nvidia continuing to rise—and even approaching its record high—the market clearly isn’t worried. Maybe it should be.

Write to Adam Clark at adam.clark@barrons.com