Nvidia Faces Critical Earnings Test Following Steep Stock Selloff

2026-11-11 companies

Santa Clara, Thursday, 12 November 2026.
Despite a sharp thirty percent drop driven by leadership investigations, strong artificial intelligence demand positions Nvidia for a potential earnings surprise ahead of its November 17 report.

Nvidia’s Tumble Sets Stage for High-Stakes Earnings

Nvidia Corporation (NASDAQ: NVDA) is poised to report its fiscal third-quarter 2027 earnings on November 17, 2026, following a dramatic 30% plunge in share price from its October 2026 peak [1][3]. The selloff, exacerbated by reports of an independent investigation into CEO Jensen Huang and broader geopolitical concerns, has left the stock trading at levels unseen since early 2026 [2][3][6]. Despite the decline, analysts emphasize that Nvidia remains the dominant player in the AI data center GPU market, holding up to 95% share as of November 2026 [3].

AI Demand Remains Unabated, But Risks Linger

Underpinning the optimism around Nvidia’s earnings potential is the relentless demand for AI infrastructure, with data center revenue surging from $3 billion in fiscal 2020 to an estimated $385 billion in fiscal 2027 [2]. Morningstar projects fiscal 2028 revenue could reach $672 billion, reflecting a compound annual growth rate of 74.545% [2]. However, risks persist: customer concentration, geopolitical restrictions in China, and margin pressures from rising memory chip costs threaten near-term profitability [2][3][4]. The company’s gross margin is expected to decline to approximately 74% in the current quarter, down from prior levels [3].

Analysts Split on Outlook Ahead of Earnings

Wall Street remains divided as Nvidia approaches its earnings report. While consensus estimates project earnings per share (EPS) of $2.47 for the quarter, a 101% year-over-year increase, some analysts have trimmed price targets amid growing uncertainty [3][4][5]. Citi reduced its target to $285, citing margin pressures from higher high-bandwidth memory (HBM) costs, while Wells Fargo lowered its target to $300 but maintained a ‘Buy’ rating [4][5]. Meanwhile, Morningstar’s $310 fair value estimate underscores the wide economic moat Nvidia holds, though its ‘very high uncertainty’ rating reflects the volatility surrounding CEO Huang’s ongoing investigation [2].

What to Watch in the November 17 Report

Investors will scrutinize three key areas in Nvidia’s earnings release: guidance for AI revenue growth, updates on supply constraints tied to TSMC’s 2nm fabrication ramp, and commentary on geopolitical risks, particularly in China [1][2][3]. Analysts at Baird downgraded Nvidia to ‘neutral’ with a $200 target, citing the dual pressures of leadership scrutiny and AI spending sustainability [6]. Conversely, RBC Capital reiterated its ‘Buy’ rating, emphasizing Nvidia’s role in driving the ‘durability of the AI investment cycle’ [5]. Regardless of the outcome, Nvidia’s upcoming report will serve as a critical inflection point for the AI chip sector [GPT].

Sources

Semiconductors Artificial intelligence