4 big questions for Nvidia, the most important stock in the market
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The AI trade bellwether is set to report earnings after Wednesday's market close.
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August 26, 2025
08:30 PM
CNBC
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holding and AI trade bellwether Nvidia is set to release earnings after the close Wednesday — a hotly anticipated report with market-moving implications, to say the least
As Jim Cramer put it earlier Tuesday: "Nvidia is the most important stock in the market." While all this hype can be a burden, Nvidia's as the dominant vider of AI computing nology for data centers is undeniable
All signs suggest that the demand for that nology is undeniable too, particularly for its Blackwell family of AI chips
Accordingly, it's widely expected that Nvidia will report better-than-expected sales and earnings compared with the Wall Street consensus
But there's a catch: With a beat largely expected, it's the magnitude of the beat that investors will be focused on, and that will in turn determine the stock reaction
With a setup this, simply matching expectations amounts to disappointment, so a beat is the bare minimum requirement come Wednesday evening
The data backs that assertion up
In its past 12 earnings releases, Nvidia topped earnings expectations all but one time, according to FactSet data
And yet, the stock has still declined four times on the first day post-earnings, while it has climbed on the other eight
When it has declined, the average drop is 4.7%, with a median decline of 4.4%
When it has advanced, the increase has been 9% on average, with a median advance of 6.7%
The overall move on the first post-earnings day amounts to a gain of 4.4% on average and a median move of positive 1.9%
As of Tuesday afternoon, the implied move for the stock this time around stands at 6.5%, based on options
The conversation on Wednesday is ly to circle around a few big dynamics
The coming ramp of Nvidia's second Blackwell-based chip known as the GB300 is responsible for three of them
This is duct is a successor to GB200, which Nvidia CEO Jensen Huang first unveiled in March 2024 and later began rolling out to customers in late last year
The GB300 was announced this March and cloud-computing viders started to get their hands on them this summer
Firstly, will we hear on the conference call that some customers are holding back on their GB200 orders to wait for its predecessor? We doubt it given how hard it is to get the chips and the risk of being late to innovate on the AI front, but we're keeping our ears open for ary on this transition dynamic regardless
The second, more certain topic of discussion around the GB300: What impact will ramping up duction have on fit margins? That's an increasingly important metric for investors as Nvidia's revenue growth rate runs into the law of large numbers
Scaling up the duction of a new chip tends to pressure margins because the related investments come before the actual sales
As a result, we're in a world where Nvidia is ducing and selling the GB200 while spending additional capital to prepare GB300 for mass adoption (without generating any sales on it)
The magnitude and duration of the margin crunch are sure to get increasing focus as we work through the back half of 2025
A third thing we'll be listening for on Blackwell is discussion around total cost of ownership, sometimes called TCO for short
Can management offer any color on how beneficial these chips are? While Nvidia's chips are not the cheapest upfront, the company argues they vide the best long-term value because it's not the upfront cost that a data center operator is worried , but how much it costs to operate the chip over its lifetime — i.e., the total cost of ownership, which also includes the initial purchase price of the chips and operating costs such as energy
A reduction in TCO when moving from GB200 to GB300 due to efficiency gains would certainly be attractive to the buyers of these chips, especially as energy demand continues to increase and electricity prices see upward pressure
Outside of Blackwell, China is the source of the fourth question after the Trump administration recently revised chip export rules to allow for Nvidia to resume shipments of its made-for-China H20 chip (as long as the U.S. government gets 15% of sales)
However, while the U.S. may now be OK with selling these chips into the Chinese market, there is news of pushback in China
Some of the pushback comes due to security concerns, specifically the idea that Nvidia may be building in a backdoor to allow the U.S. to spy on China, a claim Nvidia that has denied
Another source of pushback is the belief that China needs to be self-reliant use chips made by Chinese designers and manufacturers
Then we also got reports that Nvidia was winding down duction of the H20, putting the future revenue opportunity of China sales that much more into question
Nvidia's response to the duction halt was simply, "We constantly manage our supply chain to address market conditions." Put it all together, there's a lot of moving parts on the China front
Can Nvidia management vide any clarity on their China expectations, not only for the current quarter but longer-term, including the potential for a built-for-China variant of Blackwell? We and the rest of the market are hoping for some
Finally, any ary on networking sales within its data-center segment and Nvidia's various cloud partnerships beyond the major hyperscalers — think the s of CoreWeave , or so-called neoclouds — will also ly be of interest on the call
In the below, the 's Paulina Likos chatted with Freedom Capital's Jay Woods, who is also a CNBC contributor, to get his thoughts on what Nvidia's report means for the broader market
As always, we'll be viding our analysis on Nvidia's quarterly results Wednesday night. (Jim Cramer's Charitable Trust is long NVDA
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