Here’s what Nvidia needs to do to unlock an even better stock valuation
Brian Sozzi· Executive Editor
Fri, August 21, 2026 at 5:36 PM GMT+5:30
3 min read
- NVDA
-0.33% - ^GSPC
-0.87%
If there is any reason to proceed with caution ahead of Nvidia’s (NVDA) earnings on Aug. 26, it’s that the market is positioned for the company to post something great and for CEO Jensen Huang to sound super bullish on the earnings call
They also know there is minimal downside risk to Nvidia’s growing investment portfolio, given the rising valuations (see Anthropic (ANTH.PVT), for example) being afforded to most privately held names in artificial intelligence
Factor in Nvidia’s stock outperforming the S&P 500 (^GSPC) by five percentage points over the past month, per Yahoo Finance AlphaSpace data, and it suffices to say expectations are running hot into earnings
So a rerating in the chip king’s stock — where an even better valuation could be unlocked due to increased investor interest — won’t be easy. It can be done, though, HSBC analyst Frank Lee wrote in a new note on Friday
“The next major re-rating for Nvidia will be driven by a new narrative as earnings and the product roadmap have become less meaningful narratives for re-rating,” Lee said
(NVDA)
Go deeper with AlphaSpace
216.85-0.71(-0.33%)
At close: August 20 at 4:00:00 PM EDT
Lee contended that new narrative could be the company’s “positioning itself as the world’s largest contributor to open-
“According to Nvidia, the aggregate of open-ken generation,” Lee said. “This is critical as open- are emerging as the preferred engine for agentic AI and on-device applications.”
“A boost in small language models presents significant earnings upside by lowering the barrier to entry for enterprise inference, expanding the total addressable market (TAM) for Nvidia’s infrastructure beyond just a few frontier labs to millions of individual developers and sovereign nations,” he added
Nvidia has taken other steps of late to arguably rerate its stock
Earlier this month, Nvidia partnered with financial powerhouses — including Apollo Global Management (APO), BlackRock (BLK), Blackstone (BX), Brookfield (BN), Goldman Sachs (GS), and KKR (KKR) to establish independent compute financing platforms. (Disclosure: Yahoo is a portfolio company of funds managed by affiliates of Apollo Global Management.)
The consortium is looking to deploy $500 billion in private capital to fund AI data centers and “AI factories,” transforming Nvidia hardware into an investable asset class for institutional capital
Huang quickly followed this up with a deal to provide up to $105 billion in credit support and residual value guarantees for SB Energy’s 8-gigawatt PORTS Technology Campus in Pike County, Ohio. The massive facility will be leased by OpenAI (OPAI.PVT) and will run exclusively on Nvidia AI infrastructure
