Cisco's post-earnings drop offers a warning for Nvidia bulls as the stock runs 12% into Aug. 26. Goldman's Schneider says the elevated bar can be cleared if hyperscaler profitability and capital returns hold up.
Nvidia reports fiscal second-quarter results on Aug. 26. The stock has gained 12% in the two weeks through Thursday, narrowing the gap to its 52-week high to roughly 5%. That rally sets a high bar for the print, Goldman Sachs analyst James Schneider said.
Cisco Systems offered a template. The networking company beat quarterly estimates and raised its outlook Thursday evening. Its stock had run up 65% in six months heading into the report. It fell the next day.
Schneider said he expects a solid quarter for Nvidia with meaningful upside to guidance, supported by tight GPU supply and demand trends. The elevated expectations stem from strong demand data points, including positive 2026 capex revisions from U.S. hyperscalers and commentary on near-term GPU capacity shortages, he wrote in a note.
Consensus calls for revenue near $92 billion, roughly double the year-ago figure, and earnings per share of $2.08, also nearly double. The surge is driven by demand from hyperscalers and enterprises for Nvidia's AI data center chips and the ramp of its Blackwell architecture. The setup leaves little room for error. A guidance miss could reverse the rally.
Schneider said the stock can re-rate if hyperscaler profitability improves and capital returns remain strong. He also noted the importance of measured customer financing outlays. Nvidia trades at 14.4 times forward earnings, a discount to peers, he added.
Nvidia's Alpha Score stands at 77 out of 100, a Strong label, according to AlphaScala data. The stock traded at $225.86 on Friday, up 0.79%. For more on NVDA and CSCO, see their stock pages.
The report is due after the close on Aug. 26.
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