One Date Nvidia Investors Should Not Overlook This July
Key Points
Nvidia is riding a strong tailwind in the artificial intelligence industry.
Upcoming financial results from one of its biggest customers should tell us something about the market.
Nvidia (NASDAQ: NVDA) will release its next quarterly update in late August. However, there are several dates in July that its shareholders should pay close attention to. One of them is Wednesday, July 29. Here is why.
All eyes on the hyperscalers
A few of Nvidia's customers account for a large percentage of its business. During its fiscal year 2026, ending Jan. 25, the company said that sales to one of its clients made up 22% of its revenue, while another accounted for 14%. There is a lot of speculation about who they may be, but many analysts believe these mystery customers belong to the ranks of the hyperscalers, or leading cloud computing providers. And the single largest Nvidia customer among them may be Microsoft.
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Even if the software leader isn't the company at the top of Nvidia's largest clients list, it definitely is somewhere in the mix. That brings us to Microsoft's next earnings update, for the fourth quarter of its fiscal year 2026 (ending June 30), which it will report on July 29. Microsoft's financial results could give us a clue as to how Nvidia's business performed over the past few months and where it may be headed next. If Microsoft's year-over-year sales growth in its cloud business accelerates, and the company provides strong guidance and reports a robust cloud backlog, those would be bullish signs for Nvidia.
It will also be interesting to see Microsoft's capex guidance for its fiscal year 2027. If the company says it plans to spend significantly more, Nvidia's shareholders should celebrate, as it would likely signal that artificial intelligence (AI) infrastructure spending hasn't peaked yet. That's why Nvidia's shareholders should have this date circled in their calendars.
Is the stock a buy?
In the meantime, we can already point to several signs that suggest that Nvidia still has a large addressable market. Alphabet, another hyperscaler, explicitly said its capex spending will grow significantly in 2027. Nvidia itself has strong visibility through next year, with the company expecting $1 trillion in purchase orders for its Blackwell and Vera Rubin architectures. Further, Nvidia is still innovating and is already planning to release the Feynman GPU and Rosa CPU in 2028, which will likely be even more powerful than its current hardware.
Nvidia's ability to design more powerful products than its competitors is just one of the many reasons it remains a leader in the GPU (Graphics Processing Unit) market. The company can also thank its CUDA platform, which gives it a competitive moat due to high switching costs. And over the next few quarters, we could see Nvidia make significant progress in the CPU (Central Processing Unit) market as it taps into the large opportunity created by the rise of autonomous AI agents that run on CPUs. All these factors already highlight attractive opportunities for the company. Upcoming financial results from Microsoft and other hyperscalers may only confirm what we already know.
Prosper Junior Bakiny has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.