Nvidia shares surged 6.8% on August 27, putting the company on track to add approximately $295.7 billion in market value and marking its best single-day performance since June 1 if the gains hold. The rally followed Nvidia's forecast on Wednesday for a 70% increase in revenue in its next fiscal year, an unusual move for a company that typically provides only quarterly projections. The outlook helped reassure investors who had grown concerned about whether the rapid buildout of AI infrastructure could continue at its recent pace. As analyst Ipek Ozkardeskaya from Swissquote noted, "It's impossible for investors to turn their backs on this company: it is growing fast, and it is incredibly profitable. This is not pricing in a dream; this is reality."
The quarter delivered exceptional results that significantly exceeded expectations, with revenue hitting $96.2 billion, up 106% from a year ago, as reported by Fundstrat. This represents an acceleration from 85% growth in fiscal Q1, 73% growth in Q4 2025, 62% growth in Q3 2025, and 56% growth in Q2 2025. The data-center engine generated a staggering $89 billion, with management now seeing third-quarter revenue near $108 billion, representing another 12.3% sequential increase. Stifel expects Vera Rubin to deliver roughly 20% of next quarter's data-center sales, indicating continued strong momentum across Nvidia's core business segments. Adjusted earnings per share skyrocketed 111% to $2.22 from $1.01, easily topping analyst expectations of $2.09 on sales of $92.3 billion. The company also provided its first-ever year-ahead forecast, projecting 70% revenue growth in fiscal 2028, well above the 44% growth analysts have been projecting, with management noting growth would be higher if not for supply constraints.
Despite Nvidia's strong fundamentals, technical analysis reveals a more complicated picture that challenges the stock's traditional trading patterns. WarrenAI analysis from InvestingPro highlights that Nvidia previously formed an inverse head-and-shoulders pattern activated on July 22, but this pattern was invalidated on July 27, making it a failed technical structure. The stock then surged 8.74% on the earnings reaction before moving into a range that lacks confirmation as a rectangle pattern. The most recent weekly candle produced a long-legged doji, indicating significant indecision as buyers and sellers pushed the stock in both directions without establishing clear control. This creates an unusual situation where the company's current numbers remain extraordinary while the debate increasingly centers on how long such growth can continue. The longer-term Fibonacci target remains at $267.29, providing another objective for the bullish structure, though the route toward it remains uncertain.
Despite Nvidia's strong performance, broader market volatility showed signs of stabilization following Federal Reserve Chair Kevin Warsh's Jackson Hole speech. The Cboe Volatility Index (VIX) fell to as low as 14.1, marking its lowest reading all year and touching the year-to-date low. This decline came after Warsh's speech, which caused Fed rate hike odds to jump to nearly 60% for the September meeting, up from just 35% on Thursday, according to CME Group Fed funds futures. As Ben Emons, managing director at Highline Asset Management, explained, "The VIX is low because a Fed that is vigilant on inflation without having to hike aggressively is seen as positive for the economy to bring inflation down, bolstering the bull case for stocks." The S&P 500 was down only three-tenths of a percent, about half the roughly 60 basis-point range options pricing had implied for Friday's session, while bitcoin and gold each dropped at least 2.5%, further evidence that investors across asset classes are preparing for higher interest rates.
The company's strong performance has sparked a significant debate between two prominent Wall Street investors with opposing views on Nvidia's valuation. Fundstrat's Tom Lee argues that Nvidia remains inexpensive despite the post-earnings surge, citing that earnings estimates are being revised upward so aggressively that the stock price cannot keep pace. "The thing that stands out is that Nvidia's multiple is still very low," Lee told CNBC, explaining that "they've got these huge revisions. The stock hasn't kept up. Now the P/E keeps contracting." In contrast, Michael Burry of Scion Asset Management has quietly expanded his bearish position, adding to his short position before the earnings release and now holding Nvidia put options that account for roughly 3.5% to 4% of his portfolio. Burry purchased December call options with strike prices in the mid-to-high $200s as a hedge against the possibility that the stock moves sharply higher. The contrast highlights different perspectives on whether Nvidia's current valuation already reflects its remarkable fundamentals or has room to expand further.
