NVIDIA (NVDA 4.55%) posted big gains in trading on Friday, with shares of the artificial intelligence (AI) leader closing the day’s session up 4.6%, according to data from S&P Global Market Intelligence.

In a note released this morning, Evercore maintained its Outperform rating on Nvidia stock and raised its price target to $150 per share from $145. At the time of the note’s release, the new price target suggested 19% upside potential.

In addition to bullish analyst coverage, Nvidia stock was boosted by comments from Federal Reserve Chairman Jerome Powell this morning. Powell stated that the time has come for a turnaround in interest rate policy, strongly suggesting that the Fed will cut rates at its September meeting. Lower interest rates are typically a positive catalyst for the stock market as a whole, and a low-interest rate environment often leads to particularly strong gains in growth stocks.

This week is over, and attention now turns to Nvidia’s big earnings report next week. The AI ​​leader is expected to release its second-quarter results after the market closes on August 28. It will be one of the most closely watched events in the stock market this year.

Is Nvidia stock a buy ahead of the highly anticipated Q2 report?

In its last update, Nvidia forecast revenue of around $28 billion and non-GAAP adjusted gross margin of 75.5% in the fiscal second quarter. Wall Street expects the company to deliver even better results, with the average analyst estimate calling for revenue of $28.6 billion.

Nvidia has beaten revenue and profit expectations over the past year, and there are signs that the company will deliver another round of performance improvements when it releases results next week. In particular, capital spending data and forecasts from major customers, including Microsoft And Meta-platformsindicate that the market leader in AI chips is in a good position to significantly increase sales.

However, investors should keep in mind that high expectations ahead of the big Q2 release could also set the stage for volatility. With reports that Nvidia may delay its next-generation Blackwell processors and guidance under scrutiny, there is a risk that the tech giant’s share price could see a pullback even if last quarter’s revenue and profit beat expectations.

Ultimately, Nvidia’s strong competitive position in the AI ​​space means the stock still appears to be a smart buy for long-term investors. But the potential for volatility ahead of the company’s Q2 report suggests that applying a dollar-cost averaging strategy could be a better move than investing in the company all at once.