Nvidia reports earnings tonight.

The timing couldn’t be more dramatic.

The broader market has been selling off for weeks.

Nvidia itself has dropped from $210 to $181.

Investors are muttering (again) about an “AI bubble.”

But here’s the truth: there’s no AI bubble.

There’s only a bubble about people talking about bubbles.

Under the surface nothing has changed. And that’s exactly why Nvidia is setting up for a move higher.

Here’s my reasoning.

Reason #1: Nvidia’s Valuation Is NOT Bubblicious

People assume Nvidia is wildly overvalued. It isn’t.

Since the launch of ChatGPT in late 2022:

• Nvidia’s revenue is up 6x.

• Profits are up 9x.

• Its stock price is up 10x.

Today, Nvidia trades at 50x trailing earnings – one of the lowest multiples this company has had in years.

On next year’s earnings, NVDA trades at just 27x, putting it right in line with companies like Starbucks, Mastercard, Hershey, and TJX.

But here’s the kicker: Earnings estimates keep rising.

Just 90 days ago, Wall Street expected Nvidia to earn $5.90. Today that estimate is up to $6.83.

And these estimates tick higher every day.

This is the exact setup I love: A stock drifting lower while earnings move sharply higher.

That gap always closes… And it usually closes to the upside.

Reason #2: Hyperscalers Haven’t Slowed Down

If Nvidia’s business were truly slowing, you’d see it first in the spending habits of the hyperscalers.

But here’s what the hyperscalers actually said over the last month:

Meta (META):

“We currently expect 2025 capital expenditures... to be in the range of $70 billion to $72 billion, increased from our prior outlook of $66 billion to $72 billion. Our current expectation is that CapEx dollar growth will be notably larger in 2026 than 2025.” – Meta CFO Susan Li

Microsoft (MSFT):

“With accelerating demand and a growing RPO balance, we're increasing our spend on GPUs and CPUs... and now expect the FY '26 growth rate to be higher than FY '25.” – Microsoft CFO Amy Hood

Alphabet (GOOG):

“We’re continuing to invest aggressively... We now expect CapEx to be in the range of $91 billion to $93 billion in 2025, up from our previous estimate of $85 billion... Looking out to 2026, we expect a significant increase.” – Alphabet CFO Anat Ashkenazi

Amazon (AMZN):

“Looking ahead, we expect our full year cash CapEx to be approximately $125 billion in 2025, and we expect that amount will increase in 2026.” – Amazon CFO Brian Olsavsky

These are explosive numbers.

This is not the end of the AI buildout or even a slowdown.

This is the hyperscalers loading up for years of demand with Nvidia minting cash from every dollar spent.

Reason #3: Nothing Has Actually Changed

Stocks sometimes fall simply because sentiment weakens – not because fundamentals deteriorate.

That’s what’s happening here.

Maybe investors are rattled by Sam Altman’s oddly defensive interview earlier this month about trillions in future AI spending.

Maybe Oracle’s recent debt binge raised eyebrows.

Maybe it’s just a tired market after a massive runup since April.

None of these change the reality for Nvidia’s, however.

Nvidia is still the dominant pickaxe-and-shovel provider of the AI era.

Hyperscalers are still spending aggressively.

Earnings estimates are still rising.

And the company now trades at one of the most reasonable valuations in years.

The stock price has moved lower. The business hasn’t.

Here’s My Take Before Earnings

This pullback isn’t the start of an AI collapse.

It’s the market mispricing a company whose fundamentals have only improved.

Nvidia is still the irreplaceable supplier of AI compute, earnings estimates keep rising, and hyperscalers are spending like the boom has barely begun.

Earnings tonight may add volatility, but the long-term direction is unchanged.

I suggest you own the stock.