Nvidia Stock Pulls Back as Earnings Put $80B Buyback in Focus

Nvidia stock retreated from its August high as investors reassessed AI financing risks before next week’s earnings report.

NVDA recently traded around $220 after reaching above $227 earlier in August. The pullback came as investors examined Nvidia’s growing financial commitments to AI infrastructure projects.

Attention now turns to Aug. 26, when Nvidia will report fiscal second-quarter 2027 results. The report should provide clearer evidence on revenue growth, margins and capital-return plans.

Nvidia Stock Pulls Back as AI Financing Risks Grow

NVDA stock has slumped in the past few days as investors react to some of its actions. One of the most significant concerns was the company’s decision to back OpenAI’s massive data center in Ohio. It will provide up to $105 billion for the credit and compute for an OpenAI data center, which will be built by SB Energy, a company backed by SoftBank.

As part of the deal, OpenAI will use Nvidia’s chips, intensifying concerns about its circular financing model. This is a situation where the company invests in firms, which then become clients using its data centers. It has entered such agreements with companies like CoreWeave, Nebius, and IREN.

In a separate move, the company reached a $500 billion deal with major financial institutions like Brookfield, Goldman Sachs, and BlackRock. This move will see these companies provide financing to companies that use its products and services.

Further, there are concerns about the ongoing AI boom, which some investors believe has become a bubble that may burst soon. If this happens, Nvidia will be one of the most exposed companies because it has become one of the top beneficiaries of the boom.

The next important catalyst for the NVDA stock will be the upcoming earnings report, which will provide more details about its revenue growth and profitability.

Nvidia Earnings are Coming Up

The next key catalyst for the NVDA stock will be the upcoming earnings report that comes out next week. Analysts expect the company’s results to show that its growth accelerated in the last quarter.

The average estimate is that its revenue nearly doubled last quarter, hitting a record high of $92 billion. Chances are that the company’s real results will be higher than the company’s guidance and forward estimates.

The most important aspect of this report will possibly be the share repurchase program. In its last report, the company said it would repurchase $80 billion in shares, further reducing the number of outstanding shares.

The company may now decide to boost its share repurchases because of its cheap valuation. Data shows that the company has a forward price-to-earnings ratio of 24, much lower than the five-year average of 42. As such, the company may decide to increase its share repurchase program.

Nvidia’s outstanding shares have been in a steep downward trend, which has helped it boost its earnings-per-share in the past few years. Its outstanding shares have dropped from over 25 billion in 2022 to 24.2 billion today, and this retreat will continue. This decline has coincided with the ongoing dividend boosts.

Therefore, while an earnings beat and raise may not boost the Nvidia stock, a bigger share repurchase program may do the trick.

Nvidia Stock Technicals Put $200 Support in Focus

The TradingView daily chart shows Nvidia stock retreating from an August high near $227.

NVDA moved back toward the $216–$220 region after failing to sustain the recent advance.

Momentum has also weakened. The Relative Strength Index moved toward its neutral 50 level, showing that recent buying strength has faded.

The chart also shows price approaching an earlier fair value gap. The $200 region remains the next larger support area on the supplied technical setup.

A decline from $216 to $200 would represent roughly 7% downside.

However, that target remains conditional. NVDA would first need to break nearby support before the $200 region becomes the main downside test.

The bullish scenario requires the opposite move. A recovery above the recent $227 high would weaken the pullback structure and return attention toward Nvidia’s record high near $236.54.

For now, earnings remain the more important catalyst.

Nvidia already has substantial buyback capacity. The Aug. 26 report will show whether revenue growth, margins and cash generation remain strong enough to support the next move in Nvidia stock.

This article is for informational purposes only and does not constitute financial advice. Equity markets can experience sharp price movements.