After the turmoil in July, Nvidia's financial report may become the focus of the US stock market in August

Source: BIT Brokerage

July has turned the page. Looking back at this week-long earnings season, the U.S. stock market has been pulled back and forth by various earnings reports, with fluctuations almost becoming a daily occurrence.

However, if we were to condense this earnings season into one sentence, it would clarify one thing: the market is no longer paying for "burning money on AI," but rather for "spending AI money wisely."

Microsoft and Amazon saw their stock prices surge upon releasing their earnings reports, thanks to one thing—clarifying the relationship between AI capital expenditures and real demand, and thus being rewarded. In contrast, Google and Meta's stock prices were weak precisely because they failed to clarify this matter. Simply burning money on AI can no longer be a market consensus.

This pricing logic of "rewarding clarity and punishing ambiguity" is expected to continue directly into August. And in August, the two companies that cannot afford to fail are up for examination.

1. The Final Exam: NVIDIA Must Answer the "Cash Flow" Question

After the market closes on August 26, NVIDIA will release its latest earnings report. This may be the most impactful earnings report for the U.S. stock market in all of August, without exception.

As a $500 billion market cap company, the question NVIDIA needs to answer this time is no longer just about profit numbers, but rather the most sensitive nerve in the market right now—cash flow.

It's important to note that NVIDIA's cash flow in the last quarter was only over $50 billion. This number is astronomical for an ordinary company, but for a $500 billion company viewed as the "shovel seller" of the AI era, the market will scrutinize: with capital investments and ecosystem layouts amounting to hundreds of billions, is it mindlessly burning money, or is the money well spent?

If this question is not answered well, the resulting turmoil could be significant. Microsoft and Amazon have already demonstrated the rewards of "clarity" with their stock price surges, while Google and Meta have shown the costs of "ambiguity"—NVIDIA has no third path to take.

2. The First Exam: AMD - Every Question Relates to Its Trillion-Dollar Ambition

Before NVIDIA submits its report, its old rival AMD will take the stage first—releasing its latest earnings report after the market closes on August 4.

Currently, AMD's stock price is $472, with a market cap of less than $800 billion. This company has always viewed the trillion-dollar market cap as a goal and is currently in a narrative of striving to catch up. The market's focus on this earnings report can be broken down into four specific questions:

• First, can the revenue growth rate from data centers be maintained at over 50%—this is the core pillar of AMD's narrative;

• Second, are the shipments of MI350/MI450 ramping up or limited by production capacity—this determines whether the narrative can be converted into revenue;

• Third, is there any loosening in the Helios delivery guidance—this relates to the certainty of large customer orders;

• Fourth, can the full-year revenue guidance meet market expectations—this is the direct lifeline for stock prices on earnings report night.

These four questions essentially boil down to one: can AMD continue to tell the story of chasing NVIDIA?

3. DCF Valuation: Two Chip Giants, Risk Exposure Vastly Different

NVDA and AMD are both in the AI chip race and are focal points of the earnings season, with the market trading on the "future expectations" of both companies. However, if we switch to the traditional DCF (Discounted Cash Flow) valuation perspective, the level of risk disclosed by the two companies is vastly different.

According to the traditional DCF valuation model, AMD's fair value is around $130 per share—yet its current price is as high as $472, with a premium exceeding 2.6 times. In other words, most of the current stock price is priced based on faith in the future, rather than supported by cash flow.

In contrast, NVIDIA's current price of $200 is only slightly above its fair value of around $180. This means that behind its stock price, there is solid cash flow support, and the expected bubble content is much lower.

The message conveyed by this comparison is very direct: from the perspective of valuation safety, the investment risk of NVDA is clearly lower than that of AMD. Even if the earnings report falls short of expectations, NVIDIA's stock price has a lower probability of significant pullback compared to AMD—one is returning from "faith price" to "fair price," while the other is merely shedding a bit of premium.

For investors, this means that the two earnings reports in August require completely different responses. AMD's earnings report night will be extremely volatile; failing to answer any of the four focal questions could trigger a sharp decline, making position control the top priority; for NVIDIA's earnings report, the key is not in revenue profits—those are unlikely to be disappointing—but in cash flow presentation and management guidance, which will determine not just NVIDIA's direction, but the entire AI sector's direction in late August.

Taking a higher perspective: the rules established during the July earnings season are "those who explain clearly survive," and August is the ultimate examination of this rule. AMD is testing the "truthfulness of the chasing story," while NVIDIA is testing the "reasonableness of the leader's spending," and DCF valuation tells us that the former has a much lower margin for error than the latter.

4. In Conclusion

August's chip earnings season will be one of the most critical market windows of 2026. AMD submits its report first (August 4), followed by NVIDIA (August 26). These two earnings reports will not only determine their respective stock price directions but may also define the narrative tone of the entire AI chip sector for the second half of the year. Whether you hold chip stocks, plan to bottom fish, or consider shorting, this is a time to buckle up.

The options feature on the BIT Brokerage platform (now live) can provide investors with insurance before these earnings reports, seeking opportunities amid volatility:

• Hold NVDA/AMD common stock + buy put options to lock in downside risk;

• Buy both directions (Straddle), betting on volatility without guessing the direction—profit can be made as long as the volatility is significant after the earnings report;

• Buy call/put options in one direction, risking small for potentially large gains, with losses manageable.

Before rushing to bet on the answers to the two major exams in August, prepare the tools; it's more important than predicting numbers.

Risk Warning: The above content (including earnings report dates, market capitalization, cash flow, DCF fair value calculations, and related options strategy examples) is for market commentary and educational purposes only and does not constitute investment advice, research reports, offers, or invitations to offer, nor does it predict or guarantee the future performance of any securities such as NVDA, AMD, etc. The DCF fair value mentioned is based on specific assumptions and internal model calculations, for reference only, and does not represent a prediction of future stock price trends; actual fair value may vary significantly due to different assumptions. Options trading involves significant risks, including but not limited to principal loss, time value decay, and exercise/assignment risks; leverage can amplify both gains and losses and may not be suitable for all investors. Market data may change at any time; please refer to real-time quotes in the BIT App and official company earnings reports for specifics.