After the July turmoil, Nvidia's earnings may become the top focus of the U.S. stock market in August

July has come to a close. Looking back at this week-plus of earnings season, the US stock market has been pulled back and forth by various company reports, with up-and-down volatility almost becoming the daily norm.

But if this earnings season could be condensed into one sentence, it would actually articulate this: The market is no longer rewarding "burning cash on AI," but rather "spending AI money wisely."

Microsoft and Amazon both saw their stock prices surge upon releasing earnings, relying on the same thing—clearly explaining the correspondence between AI capital expenditures and real demand, and being rewarded for it. Meanwhile, Google and Meta saw weak stock performance precisely because they failed to articulate this clearly. Simply burning money on AI investment can no longer serve as market consensus.

This pricing logic of "rewarding those who explain clearly, punishing those who don't" is expected to directly carry over into August. And the two companies that must not fail their exams are set to turn in their papers in August.

1. The Final Exam: Nvidia Must Answer the Mandatory Question on "Cash Flow"

On August 26 after market close, Nvidia will release its latest earnings. This is perhaps the single most market-moving earnings report in the entire month of August.

As a company with a $5 trillion market cap, the question Nvidia must answer this time is no longer just about earnings figures themselves, but the most sensitive nerve in the market right now—cash flow.

It's worth noting that Nvidia's cash flow in its last quarterly report was only a little over $50 billion. That number would be astronomical for an ordinary company, but for a company with a $5 trillion market cap, regarded as the "pickaxe seller" of the AI era, the market will scrutinize with a magnifying glass: Are those hundreds of billions in capital expenditures and ecosystem investments just mindless spending, or is the money being put to good use?

If this question is not answered well, the resulting turbulence could be significant. Microsoft and Amazon have already demonstrated the reward for "explaining clearly" with surging stock prices, while Google and Meta have demonstrated the cost of "not explaining clearly"—Nvidia has no third path to take.

2. AMD Goes First: Every Question on the Exam Relates to Its Trillion-Dollar Ambitions

Before Nvidia turns in its paper, its long-time rival AMD will take the stage first—releasing its latest earnings on August 4 after market close.

AMD's stock is currently trading at $472, with a market cap of under $800 billion. The company has long viewed the trillion-dollar market cap threshold as its goal, and is currently in the midst of a narrative of catching up. The market's focus on this earnings report can be broken down into four specific questions:

• First, can data center revenue growth maintain above 50%—this is the core pillar of AMD's narrative;
• Second, will MI350/MI450 shipments scale up or be constrained by production capacity—this determines whether the narrative can translate into revenue;
• Third, is there any loosening in Helios delivery guidance—this relates to the certainty of major customer orders;
• Fourth, can the full-year revenue guidance hold market expectations—this is the direct lifeline for the stock price on earnings night.

Four questions, but essentially one: Can AMD's story of chasing Nvidia continue to be told?

3. DCF Valuation: Two Chip Giants with Wildly Different Risk Exposures

NVDA and AMD, both in the AI chip space, both focal points of earnings season, with the market trading both companies' "future expectations." But if we switch to the lens of traditional DCF (discounted cash flow) valuation, the risk profiles revealed by the two companies are vastly different.

According to traditional DCF valuation models, AMD's fair value is around $130 per share—while its current price is as high as $472, a premium of more than 2.6 times. In other words, the vast majority of the current stock price is pricing in faith in the future, rather than being supported by cash flow.

In contrast, Nvidia's current price of $200 is only slightly above its fair value of around $180. This means its stock price has solid cash flow backing it, with much less speculative froth baked into expectations.

The message this comparison conveys is straightforward: From the perspective of valuation cushion, NVDA's investment risk is significantly lower than AMD's. Even if earnings disappoint, Nvidia's downside is likely not as large as AMD's—one is a regression from "faith price" to "fair value," while the other is merely squeezing out a small premium.

For investors, this means these two earnings reports in August require completely different approaches. AMD's earnings night will be extremely volatile—any one of the four focus questions being answered poorly could trigger a deep sell-off, making position management the top priority; for Nvidia's earnings, the key isn't revenue or profit—those will likely be fine—but rather the cash flow narrative and management guidance. It doesn't just determine Nvidia's fate alone, but the direction of the entire AI sector in late August.

Stepping back for a broader view: The rule established during July's earnings season was "those who explain clearly survive," and August is the ultimate examination ground for this rule. AMD's test is "the authenticity of the catch-up story," Nvidia's test is "the reasonableness of the leader's spending," and DCF valuation tells us the former has far less room for error than the latter.

4. Final Thoughts

August's chip earnings season will be one of the most critical market windows of 2026. AMD turns in its paper first (August 4), with Nvidia as the final act (August 26). These two earnings reports will not only determine the respective stock price trajectories but may also define the narrative tone for the entire AI chip sector in the second half of the year. Whether you hold chip stocks, plan to buy the dip, or are considering shorting, this is a period where you must fasten your seatbelt. 

The options feature on the BIT exchange platform (already live) can serve as insurance for investors ahead of these earnings, helping find opportunities amid volatility:

• Hold NVDA/AMD spot + buy put options to lock in downside risk;
• Buy both directions (Straddle)—don't predict direction, just bet on volatility—as long as the move is big enough after earnings, you profit;
• Buy calls/puts in a single direction for leveraged exposure with limited downside.

Before the two big exams in August, don't rush to bet on the answers. Preparing your tools matters more than predicting the numbers.

Risk Disclosure: The above content (including earnings dates, market caps, cash flow, DCF fair value calculations, and related options strategy examples) is solely market commentary and educational material. It does not constitute investment advice, research reports, offers, or solicitations, nor does it constitute a prediction or guarantee of future performance of NVDA, AMD, or any other securities. The DCF fair values mentioned are internal model calculations based on specific assumptions, provided for reference only, and do not represent predictions of future stock price movements. Actual fair values may differ materially due to differing assumptions. Options trading involves significant risks, including but not limited to loss of principal, time value decay, and exercise/assignment risk. Leverage effects may amplify gains as well as losses and are not suitable for all investors. Market data is subject to change at any time. Please refer to the real-time quotes on the BIT App and official company filings for details.