NVIDIA Stock Could Pull Back in September, But Don’t Bet on It

Key Points

• NVIDIA's blowout quarter and guidance point to additional upside for this market.
• A price pullback isn't out of the question, but it appears unlikely in September.
• Growth, demand trends, cash flow, and capital return suggest this stock will continue to trend higher in 2025.

There are reasons to believe that NVIDIA’s NASDAQ: NVDA stock price could pull back in September, but it’s not a possibility worth betting on. Although the approximately 100% stock price advance since April provides ample reason to take profits, the Q2 results and guidance do not.

They affirm the long-term outlook for this company, which is to maintain a leadership position among semiconductors and AI specialists and sustain a robust double-digit revenue and earnings growth pace through the middle of the next decade.

Based on the results and guidance, the long-term forecasts are currently too low and are likely to increase over time, a scenario in which stock prices tend to rise. 

NVIDIA’s Blowout Quarter Did Not Include China

Investors looking to China as NVIDIA’s next catalyst still have reason to be optimistic about it. The Q2 results were a blowout and did not include sales of H20, nor did the guidance. As it is, the company grew its revenue by 56% to outpace the consensus by several hundred basis points and issued similarly strong guidance. 

The strength was evident in all end-markets, including computing and graphics, which both grew by more than 50%, and data center and networking, which grew by 56% and 98%, respectively.

Blackwell sales, the core of NVIDIA’s strength, grew by 17% sequentially and are likely to sustain this strength in the upcoming quarters. The latest reads on supply/demand suggest that demand outstrips supply by a factor of five, a favorable environment for NVIDIA and other GPU manufacturers. 

The margin news is also solid. NVIDIA’s gross margin contracted slightly, but improvements in operational quality offset this. The result is that operating income grew by 51%, net income by 52%, and adjusted earnings by 54% to outpace MarketBeat’s reported consensus by more than a nickel.

The critical takeaways are that cash flow is robust, driving a 64% year-over-year increase in the cash balance to leave it at approximately $56 billion. That’s worth more than a full quarter of revenue and is sufficient to suggest an accelerated capital return is in NVIDIA’s shareholders' future. 

Guidance will underpin NVIDIA’s stock price action for the remainder of the year. The company not only outperformed in Q2 but also issued guidance well above consensus targets. The Q3 guidance did not include sales to China, which may still be forthcoming. 

Own NVIDIA For Its Balance Sheet

NVIDIA’s booming AI business drives a robust cash flow, as reflected in the balance sheet. The 64% increase in cash is compounded by $24.3 billion in first-half 2025 capital returns, a 20% increase in assets and equity. The capital return includes a token dividend and share repurchases, which reduced the count by an average of 1.2% for the quarter and first half.

Due to the new authorization, share repurchases are likely to continue at a similar pace going forward. It is worth $60 billion and is sufficient to cover buybacks at this pace for about four quarters. Regarding leverage, the company is net cash relative to its total liabilities. 

The stock price action was mixed following the release, with shares pulling back as much as 3% in aftermarket trading. However, the move did not break critical support levels, and losses were halved before trading the following day, revealing support at the $175 level. 

Assuming this level holds, NVIDIA’s stock is poised to advance over the coming weeks. The uptrend appears intact, with strong indicators, including a convergence in the MACD, which suggests that this market will continue to move higher over time.