Nvidia (NASDAQ: NVDA) shares have declined for six consecutive days, reaching their lowest level since August 4. The stock has fallen nearly 6% from its monthly high as traders await the company’s earnings report on August 26.

Analysts estimate Nvidia’s revenue rose 96% to $92 billion in the second quarter, driven by escalating demand for its GPUs. Earnings per share are expected to move to $2.09 from $1.05 in the same quarter last year. Guidance for the third quarter is projected to reach $103 billion.

Valuation and Buyback Potential

Nvidia is trading at a forward price-to-earnings ratio of 23, significantly lower than its five-year average of 42. Its Rule-of-40 multiple stands at 121%. This valuation gap may prompt the company to escalate its share repurchase program.

In its last earnings report, management announced an $80 billion buyback and boosted its share repurchase program. Nvidia has been reducing its share count in recent years, with outstanding shares dropping to about 24.22 billion from the 2022 high of over 25 billion. These buybacks have helped push earnings per share in the past few years.

What the Numbers Show

The divergence between the current forward P/E of 23 and the five-year average of 42 suggests a compressed valuation relative to historical norms. This compression coincides with a projected 96% revenue increase, indicating that market sentiment may be pricing in near-term volatility despite strong operational growth estimates.

Technical Outlook

The daily chart shows NVDA stock peaked at $227.88 on August 17 before falling to the current level of $214. This price aligns with the strong pivot/reverse level of the Murrey Math Lines tool and the 25-day Exponential Moving Average (EMA). The Relative Strength Index (RSI) has continued falling.

Options market data supports a potential rebound, with the put/call volume ratio at 0.52 and the put/call open interest ratio at 0.67. If the stock rebounds after earnings, the next resistance level to watch is $225.

Analysts remain optimistic, with the average estimate among 31 analysts standing at $315, up by 46% from the current level.

Nvidia Corp has informed its customers of price increases exceeding 15% for certain artificial intelligence products. The notification highlights the chipmaker's dominant pricing power amid sustained global demand for high-performance computing infrastructure.

The price adjustment reflects Nvidia's ability to pass on costs or capture additional value in a market where supply remains constrained relative to enterprise adoption rates. This move underscores the critical role of Nvidia's hardware in the ongoing AI infrastructure build-out.

Market Context

The decision to raise prices by more than 15% indicates that demand for Nvidia's AI accelerators continues to outstrip available inventory. Such pricing power is rare in the semiconductor sector, suggesting that customers view these chips as essential rather than discretionary capital expenditures.

What the Numbers Show

The 15% threshold mentioned in the notification serves as a minimum benchmark for the hikes, implying that some product lines may see even steeper increases. This divergence suggests potential segmentation in pricing strategy based on chip tier or customer contract terms.