Prediction Markets Are 95% Sure Nvidia Will Beat Earnings — Here’s What That Means for Investors

Key Points

All eyes will be on Nvidia (NASDAQ: NVDA) this week. The world’s leading artificial intelligence (AI) chip designer is set to announce quarterly and fiscal 2026 earnings on Wednesday after the bell. It’s among one of the final tech giants to report in this earnings season, one that has included many positive messages.

AI powerhouses from Microsoft to Amazon have spoken of soaring demand from customers and delivered solid growth. This is as AI customers rush to get in on AI chips and other products and services to advance their projects.

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Now, prediction markets are 95% sure Nvidia will beat earnings estimates — here’s what that means for investors.

Image source: Getty Images.

Clues to support an earnings win

First, it’s important to remember that just because people are betting that Nvidia will beat estimates doesn’t guarantee that this will indeed happen. Prediction markets could be wrong. But we do have clues that support the idea of Nvidia surpassing expectations. The chip giant has done so for at least the past four consecutive quarters, for example, so it has a solid track record of positive surprises.

Messages from Nvidia’s clients, such as Microsoft, Amazon, and other cloud providers, have indicated strong customer demand, suggesting they’ve had to invest in more and more Nvidia products to meet it. And earlier this year, Nvidia finance chief Colette Kress said Nvidia was surpassing expectations of $500 billion in product sales over last year and this year.

Finally, predictions for trillions of dollars in AI spending over the next few years could already be lifting demand and revenue at Nvidia. Information technology spending worldwide may reach more than $6 trillion this year, according to Gartner.

All of these points should make us optimistic about Nvidia’s report this week.

How peers performed after reports

What does this mean for investors? Even if Nvidia beats estimates, the stock may not immediately explode higher. AI peers such as Advanced Micro Devices and Amazon, for example, delivered strong earnings reports in recent times, and their stock prices fell following these reports. In some cases, investors may lock in profits, or they might be disappointed by a certain element in the report.

But, whatever happens following Nvidia’s announcement, it’s crucial to keep the following point in mind: Nvidia is well-positioned to benefit over the next few years as this AI growth story unfolds. So short-term stock performance shouldn’t influence how we feel about the company’s potential.

If prediction markets are right and Nvidia beats estimates, that’s fantastic news for this AI giant and its shareholders — and this could lead to many more positive surprises down the road.

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Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.