Nvidia, Best Buy and 3 Stocks to Watch Heading Into Thursday

Nvidia led the tone with Q2 revenue of $96.22B, up 106% YoY and above the $92.18B consensus, and shares rose 4.7% after-hours on a strong outlook. HP also beat, posting Q3 EPS of $0.83 vs $0.69 expected and revenue of $15.68B vs $14.43B, though the stock fell 9% after-hours despite raising its FY2026 earnings forecast. Other major earnings watchlist items included Best Buy (EPS $1.38 on $9.59B revenue) and Dollar General (EPS $2.00 on $11.19B revenue) as shares traded slightly higher pre-bell expectations.

Analysis

The market is rewarding the names with visible forward AI optionality and punishing the ones whose beats look cyclical or low-quality. The key read-through is not just that AI demand is intact, but that capex is still being prioritized even after a massive run, which should keep revision momentum alive for semis, networking, and memory over the next 1-3 months. That likely widens the dispersion trade inside tech: higher-multiple AI beneficiaries can stay expensive, while commoditized hardware without a structural growth engine gets de-rated.

HPQ’s reaction is the cleaner signal on what investors no longer want to own: businesses where a beat does not change the terminal growth story. That is negative for other legacy PC/peripheral names and, more subtly, for channel partners if the earnings quality implies inventory or mix pressure rather than true end-demand. If the consumer prints from BBY, DG, and ULTA do not reaccelerate forward commentary, the broader takeaway is that the market is still fragile outside AI, and any discretionary strength is likely to be local rather than a sector-wide rerating.

The contrarian risk on NVDA is crowding, not fundamentals. If the guide is being pulled forward by a near-term supply release or hyperscaler timing rather than a broader demand inflection, the stock can give back a meaningful chunk once the gap move fades; the falsifier is a failed hold above the post-earnings breakout zone over the next week or any evidence that gross margin/forward commentary is less clean than the top-line print. More structurally, though, as long as the next round of cloud capex checks remains firm, the path of least resistance stays up for the AI supply chain.

Key Decisions for Investors

• Buy NVDA on a 2-4% intraday/post-gap pullback over the next 1-5 trading days; use a 1-3 month horizon with a stop below the post-earnings breakout low. Risk/reward is favorable if the market keeps revising AI capex higher.
• Pair trade: long NVDA / short HPQ for 1-3 months. Thesis: AI-linked earnings power deserves a premium while legacy hardware gets no credit for a one-quarter beat. Falsify if HPQ issues upside forward guidance or NVDA loses leadership relative to SMH.
• Add a watchlist alert on AVGO, ANET, and MU for sympathy strength over the next 1-3 weeks; if those names confirm, it supports extending the long AI infrastructure basket. If they lag while NVDA rallies, treat the move as narrower and more tactical.
• Avoid chasing BBY, DG, and ULTA ahead of prints; wait for guidance rather than the pre-earnings drift. If BBY or DG guide below consensus, rotate to a consumer-discretionary hedge via XRT short versus XLP long.
• Consider a defined-risk NVDA call spread for the next 4-8 weeks only if the stock consolidates above the after-hours level; otherwise the better entry is on a fade. If the spread loses momentum within a week, exit rather than averaging.