Nvidia Underperforms S&P 500 in 2026; Q2 Earnings Guidance Key to Reversal
Despite strong AI chip demand, Nvidia's stock has lagged the broader market this year, with analysts keenly focused on its upcoming Q3 revenue guidance for a potential turnaround.
The story
Nvidia's stock has faced a challenging 2026, rising only about 2% year-to-date, significantly trailing the S&P 500's 7% gain. This underperformance comes despite sustained high demand for its AI chips from hyperscalers, who continue to raise their spending outlooks for 2026 and hint at even higher investments in 2027.
Wall Street analysts anticipate Nvidia will report 96% revenue growth for its second fiscal quarter, ending in late July. However, the critical factor for investors will be the company's guidance for the third quarter.
Analysts currently model 81% revenue growth for Q3, but a forecast closer to 90% could trigger a rapid increase in share price, as this pace is not yet factored into current valuations. Nvidia's market capitalization is approximately $4.9 trillion, and it currently trades at 21.1 times forward earnings, matching the S&P 500 multiple.
Who moved
Nvidia
What Changed: Stock rose only 2% year-to-date, underperforming the S&P 500's 7% gain, despite continued strong demand for its AI chips.
Why It Matters: This highlights a disconnect between fundamental business strength and market valuation, with investors awaiting Q3 guidance to justify AI infrastructure spending.
Money & markets
Nvidia. Analysts forecast 96% revenue growth for Q2 FY27 and 81% for Q3 FY27, with a 90% Q3 forecast potentially boosting shares.
Nvidia. Trades at 21.1 times forward earnings, matching the S&P 500, despite its growth outlook.
What we'll be watching
- Nvidia's Q2 fiscal year 2027 earnings call on August 26, where Q3 guidance will be a key focus.
Reporting + analyst voices: grounded via Google Search at publish time.