Stock Price Breaks the 'Buy the Rumor, Sell the News' Pattern Post-Earnings
Following the release of its Q2 FY2027 results, NVIDIA's stock rose approximately 8.26% on the afternoon of August 27, reaching $226.97. Previously, despite strong performance for four consecutive quarters, NVDA often declined after earnings reports; this time, the market reaction was distinctly different.
Prior to the earnings report, Morgan Stanley suggested that a routine 'beat and raise' might not be sufficient to drive the stock price, and NVIDIA needed to deliver more substantial positive news. Ultimately, the company not only exceeded revenue and EPS expectations but also provided a longer-term annual growth outlook for the first time.
Q2 revenue was $96.2 billion, a 106% year-over-year increase, surpassing market expectations of $92.165 billion; non-GAAP diluted EPS was $2.22, also higher than the $2.10 market expectation. The gross margin increased from 74.9% last quarter to 75%.
70% Growth Outlook Eases Demand Peak Concerns
NVIDIA expects Q3 revenue to reach $108 billion, plus or minus 2%, while also forecasting approximately 70% revenue growth for FY2028. The company emphasized that this remains a supply-constrained outlook, with actual demand potentially higher than what can currently be delivered.
AWS will deploy an additional 2 million NVIDIA GPUs from this quarter through Q2 FY2029, while also adopting Vera CPUs and the Rubin platform. Even with AWS's own Trainium chips, this partnership demonstrates that demand for NVIDIA's accelerated computing platform from large cloud providers has not diminished.
The Vera Rubin platform has entered full production and is expected to contribute approximately 20% of data center revenue in Q3. The rapid ramp-up of the new platform is a key reason analysts remain bullish on NVDA.
Stifel Raises Target Price to $315
Stifel analyst Ruben Roy maintained a 'Buy' rating on NVIDIA and raised the price target from $282 to $315. This target price applies a valuation multiple of about 20x, which the analyst believes may still be conservative in the long term.
According to MarketBeat statistics, among the 54 analysts covering NVIDIA, 50 give a 'Buy' rating and 4 give a 'Hold' rating, with an average target price of $321.46.
However, NVIDIA's revenue concentration is high. In Q2, a single direct customer contributed 16% of total company revenue; in the first half of the fiscal year, the top three direct customers contributed 16%, 15%, and 13% respectively. If major customers slow AI investment, revenue volatility could be amplified.
The main downside risks listed in the original text include: a slowdown in AI construction pace after multiple consecutive quarters of massive investment, lower-than-expected demand from Chinese customers, and changes in the macroeconomic environment. The short-term stock price has risen rapidly to around $227, and the $315 target still implies upside potential, but those chasing the rally should also consider volatility risks after the earnings benefits are realized.
