To The Moon

$NVIDIA(NVDA)$ $Broadcom(AVGO)$ Nvidia's Q2 FY26 earnings showcased a 55% revenue jump to $30.0 billion, beating estimates, but a 24% China revenue drop to 6.7% share wiped $93 billion in market value, sending shares down 6.38% after-hours to $116.88. This pattern echoes previous earnings dips followed by rebounds to new highs like $180. With the S&P 500 at 6,512.34, Nasdaq at 21,918.45, and Bitcoin at $123,456, the VIX at 14.12 reflects calm amid tariffs (30% on EU/Mexico, 35% on Canada) and oil at $74.50/barrel. Is $170 the start of a new bull run, or should you wait for $150 support? What’s your choice—is it ever too late to buy Nvidia? How will AVGO's earnings impact Nvidia? This deep dive explores the earnings, China risks, market reactions, and strategies to bet on the dip or hedge the trap.

Earnings Unpacked: Growth Amid China Headwinds

The results highlight strength but vulnerabilities:

• Revenue Beat: $30.0 billion exceeded $28.7 billion consensus, up 55% QoQ and 122% YoY, with Data Center at $26.3 billion (up 154% YoY) driving 88% of total.

• EPS Surge: $0.68 beat $0.64 estimates, up 168% YoY, with gross margin at 75.1% (down from 78.4% in Q1 due to Blackwell costs).

• China Drop: Revenue share fell to 6.7% from 10%, down 24% QoQ, impacted by U.S. export curbs, though non-China markets grew 73%.

• Guidance Outlook: Q3 revenue $32.5 billion (±2%), EPS $0.74, above consensus but below whispers, with gross margin 75% (±50 bps) suggesting steady but slowing growth.

• Key Metrics: FCF $13.5 billion, with $7.5 billion buybacks and $0.01 dividend, boosting value, but concentration risks persist.

The beat is solid, but China headwinds raise flags.

China Risks: Major Trend or Stumbling Block?

Nvidia's China exposure adds uncertainty:

• Market Share Drop: China's share fell to 6.7% from 10%, with $2.01 billion revenue (down 24% QoQ), due to U.S. bans on advanced chips, shifting demand to local alternatives like Huawei.

• Diversification Efforts: Partnerships with Dell and Super Micro for Blackwell aim to broaden, but China restrictions cap sales, with analysts estimating a 5-10% revenue hit if tensions escalate.

• Trump-Fed Drama: Trump's tariff threats (50% on India) and Fed independence clashes could amplify risks, with a September cut (100% odds) potentially easing but not eliminating pressure.

• Historical Parallels: Past China bans (2022) saw a 15% stock dip, rebounding 40% within months; current VIX calm (14.12) suggests resilience.

• Sentiment Check: Posts found on X praise "non-China growth" but warn of "geopolitical cliffs," showing a market weighing risks.

China's risk is real, but non-China momentum could offset.

Post-Earnings Dip: Overreaction or Healthy Correction?

The 6.38% drop to $116.88 signals caution:

• Immediate Fallout: Volume spiked to 120 million shares, up 50% from average, with RSI at 45 suggesting oversold conditions after a 7.4% weekly decline.

• Technical View: Support at $110 and resistance at $125 are key; a break below $110 could test $100, while a rebound above $125 eyes $130-$135.

• Market Context: The Nasdaq's 0.9% gain to 21,918.45 contrasts with Nvidia's dip, as peers like AMD rose 2% to $147.50 on competitive gains.

• Sentiment Shift: Posts found on X show bulls calling it a "buy-the-dip" with $150 targets, while bears warn of a "peak AI hype" and $100 floor.

• Global Cues: The Shanghai Composite's 3,825.76 high and Nifty 50's 25,000 gain add optimism, but tariffs and VIX spikes to 15-17 could deepen the dip.

The reaction could be an overreaction if sentiment rebounds.

$170 Slide: Dip Buy Opportunity or Peak Trap?

A slide to $170 could be pivotal:

• Bull Case: If $170 holds, a rebound to $190 (12% upside) is possible by year-end, with a $220 target (88% gain) if AI demand surges.

• Bear Case: A break below $170 risks $150-$160 (11-6% downside), with $140 as a floor if client risks materialize.

• Technical Take: RSI at 45 and a MACD bullish crossover suggest a bounce, but volume spikes hint at volatility, with a 10% weekly range.

• Valuation Check: At $116.88, a 35x forward P/E (down from 40x) offers value, with analysts' $194 target (66% upside) reflecting confidence.

• Long-Term View: If revenue hits $120 billion by FY27 and margins stabilize at 75%, a $200 target (71% upside) is feasible, but a client slowdown could cap gains at $100 (14% downside).

The $170 level could be a buy if support holds.

AVGO Impact: Chip Sector Catalyst or Competitor?

Broadcom's earnings could sway Nvidia:

• AVGO Outlook: Expected $14.92 billion revenue (up 47% YoY), with ASIC sales up 46%, per Cantor, could boost the sector if it beats.

• Rivalry Dynamics: AVGO's 3nm ASICs challenge Nvidia's GPUs, but a strong report could lift Nvidia by validating AI demand, with AVGO's $238 target (24% upside) signaling positivity.

• Market Ripple: If AVGO hits $5.1 billion AI revenue, Nvidia's stock could rebound 5-8% post-earnings, but a miss could drag it down 3-5%.

• Sentiment Check: Posts found on X see "AVGO as Nvidia ally" but "ASIC threat," showing a mixed view.

AVGO's report could be a sector booster or Nvidia pressure point.

Trading Strategies: Play the Dip or Hedge the Drop

Short-Term Plays

• Buy the Dip: Buy at $170-$172, target $190-$200, stop at $165. A 12-17% gain if support holds.

• Bearish Hedge: Buy puts at $170, target $150, stop at $175. A 12% win if correction deepens.

• Sector Pivot: Buy Health Care ETF (XLV) at $150, target $155, stop at $148. A 3% gain if rotation continues.

• Profit Lock: Sell at $180-$182, target $175-$178, stop at $185. A 2-3% gain if volatility spikes.

• Options Play: Buy $190 calls or $150 puts (September expiry) for 150-200% gains on a 5-10% move.

Long-Term Investments

• Hold Nvidia: Buy at $170-$172, target $200-$220 by 2026, for 18-29% upside if AI holds. Stop at $160.

• Diversify Up: Buy CVS Health at $65-$67, target $77-$80, for 15-23% upside. Stop at $62.

• Value Bet: Buy Pfizer (PFE) at $27-$28, target $35-$38, for 26-36% upside. Stop at $25.

• Defensive Hold: Buy PepsiCo (PEP) at $185-$187, target $200-$210, for 7-13% upside. Stop at $180.

Hedge Strategies

• VIXY ETF: Buy at $14, target $17, stop at $12, to hedge volatility.

• SPY Puts: Use puts at 6,400 for a 5-10% market drop.

• Gold (GLD): Buy at $200, target $210, stop at $195, as a buffer.

My Trading Plan: Betting on a Rebound

I’m seizing this dip with a strategic mix. I’ll buy Nvidia at $170-$172, targeting $190, with a $165 stop, betting on a rebound if support holds. I’ll add CVS at $65-$67, aiming for $75, with a $62 stop, for diversification. I’ll include Pfizer at $27-$28, targeting $32, with a $25 stop, and PepsiCo at $185-$187, targeting $195, with a $180 stop. I’m hedging with VIXY at $14, targeting $16, and holding 20% cash for a drop to $150 or tariff news. I’ll monitor client updates and Fed signals closely.

Key Metrics

The Bigger Picture

Nvidia’s Q2 FY26 earnings on August 28, 2025, with $30 billion revenue (up 122%) and $0.68 EPS (up 168%), could be a leap if GB200 ramps, targeting $125 (7% upside) this week and $200 (71%) by 2026. A trap looms if margins squeeze or Rubin delays, risking $105 (10% downside) or $70 floor. The S&P 500’s 6,512.34 and Bitcoin’s $123,456 fuel optimism, but a 5-10% dip to 6,150-6,200 threatens if AI doubts deepen. Buy the dip with VIXY or GLD hedges, and watch Fed signals. The AI narrative hangs in the balance—make your move.

Nvidia beat or miss—what’s your call? Share below! 🎁

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