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Forget the summer holidays. The stock market remains open and although August can sometimes be a sleepy month for stocks, the current earnings season and geopolitical headlines have made it a busy one for 2025. For the Nvidia (NASDAQ:NVDA) share price, the coming couple of weeks could be key for the future direction of the stock. Here’s why.
Upcoming earnings report
Nvidia is expected to release its quarterly earnings on August 27. I believe it’ll be one of the most closely watched events of the season. Investors are eager to see whether the company can justify its lofty valuation and sustain its dominance in AI.
Based on what I’ve read, demand for Nvidia’s chips remains exceptionally strong, but supply continues to be the key bottleneck, limiting how much short-term output the company can deliver. Excitement is also building around the rollout of the Blackwell AI platform. If this coincides with upbeat forward guidance, it could help to push the stock higher.
At the same time, the price-to-earnings ratio of Nvidia is almost 58. I use a fair value benchmark figure of 10. Even though growth stocks trade at a higher multiple, 58 is still lofty! This means expectations are already sky-high, and any disappointment could trigger sharp volatility.
Investors will also be focused on geopolitical risks. Recent headlines, around US export restrictions and trade deals with China could hamper results and spook the market.
Exports to China
Aside from commentary on the export situation in the earnings report, the other big deal right now is the ongoing saga of exports from the US to China for Nvidia. Its ability to sell its H20 AI chip to China became a geopolitical flashpoint. Selling to the country was halted earlier this year, a move that the business said would cost it roughly $5.5bn in lost revenue.
Tensions eased following a meeting between CEO Jensen Huang and President Trump earlier this month. The decision was reversed. That reversal, however, came with an unprecedented condition that Nvidia must pay 15% of revenue from H20 chip sales to the government as part of the agreement.
On the Chinese side, despite pent-up demand, concerns linger over cybersecurity risks and overreliance on US chips. The story certainly isn’t over. Therefore, the Nvidia share price is likely to remain volatile as further headlines and changes in policy come out.
The bottom line
I think the long-term outlook for Nvidia is still very bright and it’s worth further research. The market-leading position it has in the AI space and the speed of innovation mean there’s an opportunity to grow revenue and profits further. However, I do think investors should brace for volatility in the coming couple of weeks. Being patient and having the right time horizon can make it easier to deal with sharp short-term moves.
