Nvidia (NASDAQ:NVDA) is heading into its August 26 earnings date with fresh evidence that AI infrastructure spending is still accelerating. On July 23, Amkor Technology (NASDAQ:AMKR) announced a multi-year, $1.5 billion agreement with Nvidia to expand advanced chip packaging and test capacity in the US, news that sent Amkor shares up about 15% in late trading and added another data point to a stock that has already been on the move.
Under the deal, Nvidia will make a prepayment to help Amkor expand its US advanced packaging operations, including capacity in Arizona, and the two companies will jointly develop packaging and testing technologies for Nvidia’s AI and accelerated-computing platforms, with a focus on combining different chip types inside a single package. Amkor already handles advanced packaging for Nvidia’s data center processors, so the agreement deepens an existing relationship rather than starting a new one, and it lands weeks after Amkor struck a separate 10-year partnership with TSMC in June to build out US packaging capabilities.
Bull Case: Locking Down Capacity Before It’s Needed
The bullish significance of the Amkor deal is that Nvidia is securing advanced packaging and testing capacity before the next wave of AI demand arrives. On August 5, the stock jumped as much as 4.9% after SpaceX, reporting its first earnings as a public company, revealed it will build its AI systems exclusively on Nvidia GPUs using the Vera Rubin architecture, with Elon Musk saying SpaceX expects to receive “a very significant percentage” of Nvidia’s GPU output next year. SpaceX is targeting more than 2 gigawatts of compute capacity by the end of 2026 and 10 gigawatts by the end of 2027. That news arrived alongside a broader pattern of heavy AI capex commitments from hyperscalers including Alphabet, Meta Platforms, Amazon, Microsoft and Oracle, all of which have already reported results ahead of Nvidia’s own print.
The Earnings Date Is The Real Test
None of this changes the fact that Nvidia’s stock has a history of choppy reactions to its own earnings. Shares peaked above $220 after a prior release, then sold off for weeks and now trade near $207, a pattern that has repeated across the last several quarters even as the longer-term trend stayed upward. Wall Street consensus calls for fiscal second-quarter revenue of roughly $91.8 billion and EPS around $2.08, both modestly above management’s own guidance of about $91 billion in revenue, plus or minus 2%, and gross margins near 75%. If the report merely meets those numbers rather than beating them convincingly, the stock has tended to give back its pre-earnings gains in the one to three months that follow.
The Amkor agreement itself is also not exclusive to Nvidia. Amkor is separately packaging chips for Advanced Micro Devices, and its new TSMC partnership serves the broader industry, so the deal secures supply rather than locking out competitors.
What The Positioning Data Shows
Hedge fund ownership rose from 264 funds to 275 in the most recent quarter, a sign institutional conviction is building rather than fading. Short interest is just 1.39% of float, about as light as organized skepticism gets. As of August 5, Nvidia trades at a forward price-to-earnings ratio of 22.88, a multiple that assumes continued growth but is not extreme for a company still expanding revenue this fast. Rising fund ownership paired with almost no short interest suggests the market has largely made up its mind, at least until the next print.
Where The Evidence Points
The Amkor agreement gives Nvidia more packaging capacity right as SpaceX and the major hyperscalers keep signaling they will keep spending on AI infrastructure. But Nvidia’s own earnings history shows that strong demand signals do not guarantee a smooth stock reaction once the company reports its numbers. The August 26 print will show whether $91.8 billion in consensus revenue undersells what deals like this one are building toward, or whether the market has already priced in everything Nvidia is likely to say.
While we acknowledge the risk and potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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