Nvidia stock (NVDA) rose around 2% to $212 on Tuesday, putting the stock on track to halt its seven-session losing streak as investors prepared for the chipmaker’s fiscal second-quarter earnings after the bell Wednesday.
The seven-day decline was Nvidia’s longest losing streak since 2022, with shares falling 7.5% over the stretch.
The recent weakness has also highlighted the stock’s underperformance relative to the broader semiconductor sector.
Nvidia shares are up about 15% in 2026, compared with a 66% gain for the PHLX Semiconductor Index.
Customer concentration comes into focus
Nvidia remains a central beneficiary of the artificial intelligence boom, supplying the graphics processing units (GPUs) that power data centres and some of the world’s largest AI models.
However, customer concentration remains a concern for investors.
The company relies heavily on hyperscalers such as Amazon, Google, and Microsoft, which purchase Nvidia GPUs in large quantities for their own AI workloads and cloud businesses.
Meta and SpaceX have also become significant customers as they expand their AI infrastructure.
In its May earnings report, Nvidia changed how it discloses its customer base, separating hyperscalers from what it classifies as AI clouds, industrial and enterprise customers, or ACIE.
Nvidia does not identify individual companies within the hyperscaler category.
The breakdown will be closely watched in Wednesday’s earnings report.
In the first quarter, Nvidia generated $37.9 billion in hyperscaler revenue and nearly $37.5 billion from ACIE customers.
ACIE revenue grew 31% from the previous quarter, compared with 12% growth for hyperscaler revenue.
The figures have increased scrutiny of whether Nvidia can broaden its customer base and maintain growth if its largest customers eventually slow their AI spending.
AI spending faces financial test
Concerns about customer concentration come as several of Nvidia’s largest customers face rising capital requirements to fund their own AI expansion plans.
Amazon and Alphabet both reported negative free cash flow in the second quarter, while Meta’s cash generation fell by more than 90% from a year earlier.
SpaceX and Tesla, both led by Elon Musk, also reported negative free cash flow as they ramp up AI-related investments.
The developments have added to concerns about the sustainability of the AI infrastructure spending cycle and Nvidia’s reliance on a relatively small group of large customers.
Still, analysts expect Nvidia to deliver another strong quarter, underscoring the continued demand for its AI chips despite growing questions over how long hyperscalers can sustain their current spending pace.
Analysts expect a beat
BMO Capital reiterated an Outperform rating and $340 price target on Nvidia on Tuesday.
The firm expects second-quarter revenue to come in $2 billion to $3 billion above the Street consensus of $92 billion.
BMO also expects third-quarter revenue to exceed the $104 billion consensus estimate by $2 billion to $3 billion, driven by strength in Nvidia’s data center business.
Nvidia generated $253.49 billion in revenue over the last 12 months, representing 71% year-over-year growth.
The firm expects revenue growth to accelerate further as Nvidia’s Vera Rubin architecture ramps up in the second half of the year.
Nvidia’s CPU opportunity grows
Raymond James also raised its price target on Nvidia to $352 from $330 while maintaining a Strong Buy rating.
The firm highlighted Nvidia’s growing CPU business, which currently accounts for roughly 3% of total revenue.
Raymond James expects that share to reach approximately 5% by calendar 2028.
The firm said Nvidia has increased its visibility in CPUs, particularly as demand grows for hardware supporting agentic AI applications.
Raymond James extended its financial model through fiscal 2029 and calendar 2028 and said its market analysis suggests Nvidia could become the world’s largest CPU revenue company within several years.
CPU revenue is expected to be the fastest-growing component of its model.
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