Prediction: Nvidia Stock Will Fall After Aug. 26. Here Are 2 Reasons Why

On Aug. 26, the otherwise extremely fast-paced Wall Street will slow down and pay close attention as Nvidia (NASDAQ: NVDA) reports its financial results for the second quarter of its fiscal year 2027, which ended on July 26 (Nvidia's fiscal years do not match calendar years). Since the company is at the very center of the artificial intelligence (AI) infrastructure build-out, thanks to its dominance in the GPU (Graphics Processing Unit) market, Nvidia's quarterly updates have become critical to gauging the health of the AI industry and where it might be headed next. Nvidia has outperformed the broader market so far this year, but which way will the stock move post-earnings? My view is that Nvidia's shares are likely to decline. Here are two reasons why.

Image source: The Motley Fool.

Even Nvidia's internal projections have constantly underestimated the company's ability to capitalize on the AI boom. Over the past few years, the semiconductor specialist has, as a rule, delivered earnings beats. The market cheered these performances in the early days of the ongoing AI revolution. However, it has become accustomed to them. Now, investors expect Nvidia to beat its own revenue and earnings guidance and analyst estimates, which means that's already baked into the stock price.

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