Nvidia Corp. (NASDAQ:NVDA) reports second-quarter earnings Wednesday after the bell, and tech investor Dan Niles said Wall Street’s growth expectations may be too conservative given what its biggest customers are spending.
Hyperscaler Spending Hits Its Fastest Pace Since ChatGPT
Niles, founder of Niles Investment Management, said on X that hyperscaler capital expenditure grew 92% year-over-year and 29% quarter-over-quarter in the three months ended June 30, the fastest pace since ChatGPT launched in late 2022.
He added that public cloud revenue growth at the three largest cloud vendors accelerated to its fastest pace ever, up 43% year-over-year and 15% quarter-over-quarter, while their aggregate operating margins expanded by 2 percentage points to a record 39%.
That acceleration, Niles noted, stands in sharp contrast to Wall Street’s own expectations for Nvidia, whose quarterly revenue growth is projected to slow to 13%, down from more than 20% in each of the last three quarters.
James Carville: "as the bond market. You can intimidate everybody." Despite Bessent’s efforts, bond ylds increased last wk 1-7 bps while S&P/Nas/SOX (AI proxy) -1.4%/-2.1%/-5.4%. Next wk has Iran sanctions (Mon), $NVDA earnings (Wed) & Warsh at Jackson Hole (Fri.)On Monday, the…
— Dan Niles (@DanielTNiles) August 23, 2026
Goldman Sachs analyst James Schneider echoed the strength in demand, saying he expects “a solid quarter with meaningful upside to guidance supported by tight GPU supply/demand trends,” according to a report by TheStreet.
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A Favorable Setup Despite Political Risk
Niles said the risk-reward for Nvidia looks good heading into earnings.
He added that the stock trades at 17 times projected 2027 earnings, below the S&P 500’s 19 times, and has fallen 4% over the past two weeks, compared with a 1% dip for the broader index.
Niles also flagged a political headwind, too, citing Gallup polling showing that 71% oppose building data centers locally, more than the 53% who oppose nuclear reactors.
Nvidia’s Wall Street’s Estimate
Analysts expect Nvidia to report second-quarter revenue of $92.03 billion, up from $46.14 billion in last year’s second quarter, according to data from Benzinga Pro.
Wall Street forecasts the company to report second-quarter earnings per share of $2.07, up from $1.04 in last year’s second quarter.
Price Action: Shares closed 0.68% lower on Friday at $214.72 and gained 0.31% in extended trading.
Benzinga edge rankings show Nvidia’s stock has a Momentum score in the 62nd percentile and a Growth score in the 99th percentile.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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