May 20 is going to be a big day for Nvidia (NVDA 4.39%) shareholders, but also for every investor. Nvidia has grown to become a massive $5 trillion company that is a huge part of every major stock index. So, if Nvidia does well, so does the whole market. If Nvidia skips a beat, the broader market will also take a hit. Luckily for investors, I think good news is coming after market close on May 20 that could cause the stock to soar on May 21.
Nvidia reports its first-quarter earnings on May 20, and if history is any indicator, the stock could be in for a wide move. I think the situation looks pretty similar to years past, making Nvidia an excellent candidate to soar after beating expectations.
Image source: Getty Images.
Nvidia has a history of outperforming expectations
Over the past year, Nvidia has consistently outperformed Wall Street analysts’ expectations. This stems from the fact that AI demand has always exceeded what everyone expected, and all the signs are there for Nvidia to do it again.
AI demand is still high, and companies like Meta Platforms (META 0.66%) have already boosted their capital expenditure guidance for 2026 due to higher data center component pricing. While Meta wasn’t specific about which component that was, it shows that there’s a general lack of supply of computing equipment compared to demand. As a result, supplier Nvidia’s business should remain strong and will likely deliver an earnings beat.
Today’s Change
(-4.39%) $-10.35
Current Price
$225.39
Key Data Points
Market Cap
$5.5T
Day’s Range
$224.30 – $231.50
52wk Range
$129.16 – $236.54
Volume
42K
Avg Vol
171M
Gross Margin
71.07%
Dividend Yield
0.02%
As another positive note, Wall Street analysts are already bullish on the ongoing quarter. They estimate Nvidia’s Q2 revenue growth rate will be about 86% — an acceleration from Q1’s expected 79%. We’ll see on May 20 how that aligns, but all of it adds up to Nvidia being one of the most dominant companies in the market.
Another reason I’m confident we will see a spike in stock price following earnings is the stock’s valuation history. Historically, Nvidia has traded at a fairly low forward price-to-earnings ratio at the start of the year. Then, following Q1 earnings, the stock rallies throughout the summer, increasing its valuation. If Nvidia works toward its normal mark of trading at 40 times forward earnings or a greater valuation point to end the year, that means there’s significant upside from now until the end of 2026. If Nvidia confirms that demand remains strong, then a continued rally should be in store following Q1’s announcement.
NVDA PE Ratio (Forward) data by YCharts
We’re already seeing the start of that pattern repeat, and if Nvidia can deliver a solid quarter, I think we could see a pretty large jump in share price.
We’ll find out what the outcome is for Nvidia’s stock following earnings, but there’s enough long-term demand that I think it’s well worth buying and holding now, as the AI build-out is far from wrapped up.
