NVIDIA Gains Momentum Ahead of Q1 Earnings: ETFs in Focus

NVIDIA is set to release its fiscal Q1 2026 earnings after market close on May 28, with expectations of 39.3% revenue growth and 63.9% earnings growth; the company has seen a 5.1% gain over the past three months, reclaiming a $3 trillion market cap. Wall Street analysts maintain a bullish outlook, with an average price target of $167.00, as NVIDIA anticipates $43 billion in revenue for the quarter and sees strong demand for its new Blackwell AI chips, reinforcing its dominance in the AI chip market.

Analysis

NVIDIA (NVDA) is poised for its fiscal first-quarter 2026 earnings release on May 28, amidst significant market anticipation, having recently reclaimed a $3 trillion market capitalization and registered a 5.1% stock gain over the past three months, outperforming the industry's 3.5% growth. The Zacks Consensus Estimate projects substantial year-over-year growth, with revenue expected to increase by 39.3% and earnings by 63.9%. NVIDIA itself has guided Q1 fiscal 2026 revenues to $43 billion, plus or minus 2%. Despite this bullish outlook and a strong historical earnings surprise average of 7.92% over the last four quarters, the company currently holds a Zacks Rank #3 (Hold) and a negative Earnings ESP of -0.41%, coupled with minor negative earnings estimate revisions in the past week, which statistically tempers expectations for an earnings beat. Nevertheless, Wall Street sentiment remains overwhelmingly positive, with 37 out of 45 brokerage firms rating the stock a Strong Buy, and an average price target of $167.00. This optimism is largely fueled by NVIDIA's dominant 80-95% share of the AI chip market and the anticipated launch of its next-generation Blackwell AI chipset, for which CEO Jensen Huang reports "amazing" demand and sees as central to the "next wave" of AI innovations. Valuation metrics appear reasonable, with a P/E ratio of 31.37, slightly below the industry average, and a notably lower PEG ratio of 1.27 compared to the industry's 2.10, suggesting potential undervaluation relative to its growth prospects.

Key Decisions for Investors

• Investors should closely monitor NVIDIA's Q1 2026 earnings report on May 28, focusing on actual revenue and earnings figures against consensus estimates, management's updated guidance, and specific commentary on Blackwell chip adoption and AI market trajectory.
• Despite the negative Earnings ESP creating some near-term uncertainty, the company's strong market leadership, robust growth forecasts, favorable analyst ratings, and comparatively attractive PEG ratio may present a continued long-term opportunity, contingent on a positive earnings outcome.
• Consider the implications of NVIDIA's performance on related semiconductor ETFs such as SHOC, SMH, and SMHX, as well as specialized single-stock ETFs like NVDX and NVDL for leveraged exposure, while being mindful of the increased risk these leveraged products entail.
• Evaluate risk tolerance in light of the mixed short-term signals (negative ESP, Hold rank) against the compelling long-term AI growth narrative and NVIDIA's pivotal role, before making or adjusting positions ahead of the earnings announcement.