Nvidia eyes August 26 earnings as buyback talk builds

Nvidia (NASDAQ: NVDA ) stock has slumped for six consecutive days, reaching its lowest level since August 4.

It has fallen nearly 6% from its high this month, with traders now focusing on the upcoming earnings report, which will offer more insight into the company’s performance.

Nvidia May Offer a Bigger Buyback After Earnings NVDA stock has slumped in the past few days as focus shifts to its earnings report on August 26.

As the company has done in the past, chances are that its revenue and earnings growth will be better than expected. data shows analysts estimate Nvidia’s revenue jumped in the second quarter as demand for its GPUs escalated.

The average estimate is that revenue rose 96% to $92 billion, with guidance for the third quarter reaching $103 billion.

Its earnings-per-share is expected to move to $2.09 from $1.05 in the same quarter last year.

A Polymarket poll has a 96% probability that its EPS will be higher than these estimates.

These numbers come at a time when the company is trading at a bargain price, with its forward price-to-earnings ratio being 23, much lower than the five-year average of 42.

Its Rule-of-40 multiple stands at 121%.

Read Also: Tom Lee's BitMine Stock Surges as Ethereum DCA Strategy Finally Pays Off Therefore, the company may decide to escalate its share repurchase program to take advantage of the cheap valuation.

In its last earnings report, management announced a $80 billion buyback and boosted its share buyback program.

Nvidia has been reducing its share count in the past few years.

Its outstanding shares dropped to about 24.22 billion from the 2022 high of over 25 billion.

These buybacks have helped to push its earnings-per-share in the past few years.

Analysts are optimistic about Nvidia’s performance, with data showing that the average estimate among 31 analysts is $315, up by 46% from the current level.

Nvidia Stock Technical Analysis Points to Volatility NVDA stock chart | Source: TradingView The daily chart shows that the NVDA stock peaked at $227.88 on August 17 to the current $214, which aligns with the strong pivot/reverse level of the Murrey Math Lines tool.

This price also aligns with the 25-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) has continued falling.

Therefore, the stock may rebound after its earnings report next week.

If this happens, the next level to watch will be at $225, the ultimate resistance level.

This bullish view is backed by the options market, with the put/call volume ratio and put/call open interest ratios being 0.52 and 0.67, respectively.

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