Why 1 Analyst Says Vera Rubin Is Key for Nvidia Stock in Q2

Nvidia (NVDA) stock is back in focus ahead of the company's Aug. 26 earnings report, and GF Securities analyst Jeff Pu believes Nvidia’s next-generation Vera Rubin platform could be the key to its next major growth cycle.

Pu recently raised his NVDA stock price target to $345 from $308 while maintaining a “Buy” rating, citing increasing orders from major U.S. cloud providers. The call comes as investors look beyond Nvidia’s current Blackwell business and ask whether the company can maintain its artificial intelligence (AI) dominance through 2027 and beyond.

Nvidia's Full-Stack AI Strategy

Nvidia doesn’t just sell chips; it is building the broader AI infrastructure around them. The fabless company designs its GPUs and AI systems while relying on third-party foundries for manufacturing. Its strategy is also expanding into financing, with partnerships aimed at mobilizing more than $500 billion in third-party capital for AI infrastructure over time. 

What truly sets Nvidia apart is its full-stack approach. The company pairs its purpose-built silicon with CUDA software, creating an ecosystem that locks in customers and generates recurring revenue. With gross margins consistently above 70% — unheard of in semiconductors — Nvidia has transformed itself from a chip vendor into the owner of the AI “operating system.”

Nvidia shares have delivered another strong year, rising roughly 15% year-to-date (YTD). NVDA stock reached a record high of $236.54 on May 14 before pulling back as investors became more cautious about AI spending and the enormous capital requirements of data-center expansion. 

The recent weakness does not necessarily signal deteriorating fundamentals. Instead, the market appears increasingly focused on whether hyperscalers can generate sufficient returns from their AI investments.

The Valuation Remains Attractive

Despite Nvidia’s massive market value, the stock does not necessarily look expensive relative to its expected growth.

Nvidia trades at around 25.1 times forward earnings, relatively in-line with its own five-year average, a level that can look attractive given the company’s exceptional AI-driven earnings expansion.

The valuation argument becomes stronger if Vera Rubin creates another major revenue cycle. Sustained earnings growth could allow Nvidia to grow into its multiple, even if investors become less willing to award the stock an expanding valuation.

Vera Rubin Could Extend Nvidia’s AI Lead

The reason Vera Rubin matters for Nvidia stock is that it represents more than another chip upgrade. Pu believes recent order additions and Nvidia’s “extreme co-design” strategy could make the platform a powerful product cycle.

Microsoft (MSFT), Amazon (AMZN), Alphabet’s (GOOGL) Google and Oracle (ORCL) have reportedly increased demand for Vera Rubin. That could help Nvidia defend its position against custom alternatives, including Google’s Tensor Processing Units and Amazon’s Trainium chips.

For investors, the bigger opportunity is duration. If Rubin launches successfully and Nvidia maintains its leadership in performance, networking, and software, the company could preserve unusually high growth rates even as competition in AI accelerators intensifies.

In other words, Vera Rubin could give Nvidia another reason for investors to pay a premium valuation rather than treating the company as a traditional semiconductor stock.

Q1 Results Set a High Bar for Q2

Nvidia’s latest quarterly results show why expectations are so elevated. In fiscal Q1 2027, revenue reached $81.6 billion, up sharply by 85% year-over-year (YOY), while adjusted EPS came in at $1.87 versus Wall Street’s estimate of $1.77 per share. Barchart data also shows that Nvidia has beaten consensus estimates in each of the previous four quarters. 

For fiscal Q2, management guided revenue of approximately $91 billion. Wall Street estimates point to Q2 revenue of around $91.9 billion and adjusted EPS near $2.08.

That means investors are not simply looking for another earnings beat. They want evidence that demand for Nvidia’s next-generation products can support continued growth.

Wall Street Remains Bullish on Nvidia Stock

Wall Street continues to favor NVDA stock. Based on 48 analysts with coverage, Nvidia has a consensus “Strong Buy” rating overall. Of those analysts, 44 have a “Strong Buy,” three recommend a “Moderate Buy,” and one has a “Strong Sell" rating. The mean price target of $306.22 represents potential upside of 43% from current levels.

Pu’s new $345 target is even more bullish and suggests roughly 61% potential upside from Nvidia’s recent trading levels. With the consensus firmly positive, investors will now be watching Aug. 26 for one thing above all: Whether Blackwell remains strong and Vera Rubin can provide the next catalyst for Nvidia stock.