Nvidia's Earnings Report: A Crucial Test for AI Market and Tech Stocks

Wall St Week Ahead Investors zero in on Nvidia results as US tech stocks waver

NEW YORK, Aug 22 (Reuters) - A wobble in U.S. technology shares has raised the stakes for Nvidia Corp's (NVDA.O), opens new tab quarterly results on Wednesday, with earnings from the semiconductor giant posing a crucial test for the scorching AI trade. The benchmark S&P 500 (.SPX), opens new tab has pulled back this week from record levels, dragged lower by a roughly 3% drop so far this week in the heavyweight tech sector (.SPLRCT), opens new tab after a huge run for the group. Fueled by its dominant artificial intelligence (AI) products, Nvidia's massive share price gains have buoyed both the tech sector and the overall market in recent years. Last month, Nvidia became the first company to top $4 trillion in market value. Investors are now more "on edge" heading into Nvidia's results, said Matthew Maley, chief market strategist at Miller Tabak. "When the group goes down and the most important stock in the group reports earnings, that is going to have a bigger impact than usual," Maley said. Nvidia's stock has climbed about 30% so far in 2025, pushing its gain to over 1,400% since October 2022. The California-based company has epitomized the broader AI excitement that has driven up shares of a raft of tech companies and others involved in AI infrastructure such as power generation and cooling systems. "Nvidia is almost looked at as a proxy to what is happening in artificial intelligence," said Matt Orton, chief market strategist at Raymond James Investment Management. "There's definitely a read-through that happens to the broader AI trade, which has really been the main driver of the S&P 500's return this year." Analysts said possible reasons for recent tech stock weakness include cautionary AI industry developments, including comments from OpenAI CEO Sam Altman that investors may be getting overexcited about AI. Nvidia's results will close out a second-quarter U.S. corporate earnings season that has largely surpassed expectations and helped support equities. S&P 500 company earnings are on track to have climbed 12.9% from the year-earlier period, up from an expected 5.8% rise on July 1, according to LSEG IBES. Goldman Sachs strategists pointed to particular earnings strength so far for the "Magnificent 7" -- the group of megacap companies that includes Nvidia as well as Apple (AAPL.O), opens new tab and Microsoft (MSFT.O), opens new tab. Including estimates for Nvidia, the Magnificent 7 are on track to have increased earnings by 26% compared with 7% for the remaining 493 stocks in the index, the Goldman strategists said in a note. Nvidia is expected to post a 48% rise in earnings per share on revenue of $45.9 billion for its second fiscal quarter, according to LSEG data. Megacap tech companies focusing on AI have recently increased their estimates for capital spending, which should be favorable for Nvidia, said Paul Roach, portfolio manager at Allspring Global Investments. Nvidia's "commentary on the demand side... should be more bullish just because their largest customers have all kind of upped their capex guidance over the last few quarters," Roach said, adding that demand for Nvidia's products is also broadening beyond the largest tech companies ECONOMIC DATA Investors will also focus on U.S. economic data in the coming week, including on consumer sentiment and inflation. Despite the latest week's tech-driven declines, the S&P 500 remains up over 8% this year and stands less than 2% below its record closing high. As tech shares fell this week, some investors rotated into other areas of the market that have not been as strong in recent weeks, such as healthcare (.SPXHC), opens new tab and consumer staples (.SPLRCS), opens new tab. But major equity indexes will be hard-pressed to keep moving higher if tech falters, given its heavy presence in those indexes, Maley said. Tech is by far the largest of the S&P 500's 11 sectors, with a 33% weight. Nvidia alone has a nearly 8% weight in the index. "If these tech stocks continue to fall, that means the indexes will continue to fall," Maley said. "No way around it." Reporting by Lewis Krauskopf; Editing by David Gregorio Our Standards: The Thomson Reuters Trust Principles., opens new tab

Investors Expect Nvidia's Earnings to Move the S&P More Than Powell's Speech

When Nvidia, the chip producer, reports earnings next week, investors expect the S&P 500 to have a bigger reaction than when the Fed chair delivers a big speech on Friday. There are plenty of data points arriving over the coming weeks that could trip up the runaway stock market. On Friday, the Federal Reserve chair delivers a hotly anticipated speech at Jackson Hole in Wyoming. Not long after that, the Labor Department will release the latest update on hiring, and then there's an important reading on inflation. When stock investors look through the end of September, however, they are most focused on the news coming from just one company. A financial report released next Wednesday by Nvidia, the chip producer, is expected to produce the S&P's biggest one-day reaction over the next month. The forecast for that market move is reflected in recent options activity -- derivatives that give an investor the right to buy or sell a stock, or an index of stocks, at a future date for a preset price. Investors use options to make bets on the direction of the market and to protect against the potential for the market to move against them. According to S&P 500 options data from Citi Global Markets, investors are positioned for a 0.8-percentage-point move -- in either direction -- on Friday, depending on what the Fed chair, Jerome H. Powell, says in his speech at the central bank's annual conference at Jackson Hole. Prices for next Thursday -- the first chance investors have to react to Nvidia's earnings released the night before -- imply a move in the index of 0.9 percentage points in either direction. The Fed still looms large over financial markets, with policy decisions that can move markets around the world. But the fact that quarterly results from one technology company focused on artificial intelligence can match, in the view of equity investors, the impact of some of the most widely tracked economic data and central bank activity reflects the significant influence that a handful of behemoth tech companies have on today's stock market. "On a relative basis, Nvidia's earnings is the largest event for the S&P 500 for the next month," said Stuart Kaiser, an equity strategist at Citi. "For equity investors," he added, "particularly in the S&P 500, the A.I. theme, and the impact of that on returns, is on par with the Fed now." As Nvidia has grown, swelling to a $4 trillion valuation last month, so has its weighting in the S&P 500. It now makes up almost 8 percent of the index. The last time Nvidia reported earnings, in May, its stock rose 3.25 percent and the S&P 500 rose 0.4 percent. After reporting earnings in February, Nvidia sank over 8 percent and the S&P 500 dropped 1.6 percent. Nvidia has led rivals in the race to dominate the high-powered chips used to power A.I., and next week investors are looking for signs that the relentless demand for Nvidia's products will continue. The company's earnings could help answer another big question looming over the stock market: whether there is a bubble in A.I., as some have speculated this week. Other large companies in the index, like Apple and Microsoft, are also tied to the A.I. theme, so Nvidia's financial results are likely to affect these other big stocks as well. "It's always a big deal," said Stacy Rasgon, an Nvidia analyst at Morningstar, joking that he had perhaps become "jaded" by the frequency of big moves in Nvidia's stock price. For comparison, when Mr. Powell spoke at Jackson Hole last year, the S&P 500 rose a little over 1 percent. The year before, his remarks were followed by a 0.7 percent increase in the index. Mr. Powell's address this week could shift investors' expectations for monetary policy and cuts to interest rate, both of which are crucial inputs for modeling the path ahead for the economy and stock market. The Trump administration has repeatedly complained about the Federal Reserve's keeping rates elevated, calling on the central bank to lower them rapidly, which would probably make borrowing cheaper and accelerate the economy. It would also help President Trump fulfill a campaign promise to bring interest rates down. So far, the Fed has resisted, warning that rapidly lowering interest rates risks heating up the economy at the wrong time, potentially stoking inflation and raising prices for consumers.

'It's Not Going to Slow Down': The Tech Stock Everyone Is Watching This Week

Wall Street is narrowing in on must-watch tech giant Nvidia (NVDA) this week, as the $4 trillion semiconductor company reports earnings amid an ongoing skid in the technology sector. "When the group goes down and the most important stock in the group reports earnings, that is going to have a bigger impact than usual," Matthew Maley, chief market strategist at Miller Tabak, told Reuters. That impact has analysts rushing to change their projections for the release of Nvidia's quarterly report on Wednesday, with multiple influential predictions now adjusted to show a higher price target of $194 per share for that 12-month period, the highest amount for which the shares have ever traded. The stock closed up more than 3% at the end of trading Friday at $177.99 amid a broader market rally led by other tech and finance companies. We covered the crypto companies that pushed that surge earlier today. "What you’re seeing is the recognition that growth at Nvidia is rock solid," Brian Mulberry, client portfolio manager at Zacks Investment Management, told Bloomberg. "Analysts are raising projections because they simply need to, the stock is not going to slow down." It's been quite a year for Nvidia. The stock has been caught in the Trump administration's tariff wars and fell sharply in April. It has since clawed back about three-quarters of those losses. But that dip followed a chilly beginning to 2025, as it became clear that even Nvidia would have tough competition from compatriot company DeepSeek, which rolled out a discount AI model that astonished the market. Recently, the stock wobbled this week as the broader AI market felt the effects of being dubbed a "bubble" by OpenAI CEO Sam Altman. More immediately, Nvidia has signaled it is willing to play ball with Trump's aggressive attempts to take stakes in major tech companies like Apple and AMD, Nvidia CEO Jensen Huang said Friday. Huang said that Nvidia is in talks with the American government to produce a new computer chip, a move that coincides with a joint announcement that the U.S. will take a 10% ownership slice of Intel. “I’m offering a new product to China for ... AI data centers, the follow-on to H20,†Huang said. But he added that “That’s not our decision to make. It’s up to, of course, the United States government. And we’re in dialogue with them, but it’s too soon to know.†In the wake of Altman's comments, however, Nvidia's share price fell to $174 from $182 in 48 hours, as proponents of the AI bubble theory came out in force. Still, no matter how much external pressure Nvidia feels from competitors and a rapidly evolving landscape of technology, it still remains the dominant player because of its sheer size and faster moves out of the starting blocks with its AI. It also has far more reach and potentially a wider variety of clients for its more diversified set of products. "[Nvidia] commentary on the demand side... should be more bullish just because their largest customers have all kind of upped their capex guidance over the last few quarters," Roach told Reuters. In fact, it is so big and has grown at such a scorching pace that if its quarterly revenue is up less than 70% year over year when it reports Wednesday, the company would likely see its share price fall. A growth in revenue at that rate would be a major coup for most other companies, 24/7 Wall Street points outâ€"for Nvidia, however, it would alarm investors who are spooked by the idea that it may eventually even slow down.

Wall Street Week Ahead: Investors zero in on Nvidia results as US tech stocks waver

Nvidia's earnings are a key test for the AI market. Tech stocks recently declined. Nvidia's results will impact the tech sector and overall market. Investors are watching closely. Nvidia's growth has fueled AI excitement. Analysts cite AI industry developments as reasons for caution. Economic data and consumer sentiment will also be in focus. A wobble in U.S. technology shares has raised the stakes for Nvidia Corp's quarterly results on Wednesday, with earnings from the semiconductor giant posing a crucial test for the scorching AI trade. The heavyweight tech sector slumped 1.6% on the week after a huge run for the group, dragging on key indexes. The sector's weekly decline moderated on Friday as stocks broadly rallied after comments from Federal Reserve Chair Jerome Powell appeared to pave the way for imminent interest rate cuts. Fueled by its dominant artificial intelligence (AI) products, Nvidia's massive share price gains have buoyed both the tech sector and the overall market in recent years. Last month, Nvidia became the first company to top $4 trillion in market value. Investors are now more "on edge" heading into Nvidia's results, said Matthew Maley, chief market strategist at Miller Tabak. "When the group goes down and the most important stock in the group reports earnings, that is going to have a bigger impact than usual," Maley said. Nvidia's stock has climbed more than 30% so far in 2025, pushing its gain to over 1,400% since October 2022. The California-based company has epitomized the broader AI excitement that has driven up shares of a raft of tech companies and others involved in AI infrastructure such as power generation and cooling systems. "Nvidia is almost looked at as a proxy to what is happening in artificial intelligence," said Matt Orton, chief market strategist at Raymond James Investment Management. "There's definitely a read-through that happens to the broader AI trade, which has really been the main driver of the S&P 500's return this year." Analysts said possible reasons for recent tech stock weakness include cautionary AI industry developments, including comments from OpenAI CEO Sam Altman that investors may be getting overexcited about AI. Also, a study from researchers at the Massachusetts Institute of Technology cast doubt on returns from AI investments. Nvidia's results will close out a second-quarter U.S. corporate earnings season that has largely surpassed expectations and helped support equities. S&P 500 company earnings are on track to have climbed 12.9% from the year-earlier period, up from an expected 5.8% rise on July 1, according to LSEG IBES. Goldman Sachs strategists pointed to particular earnings strength so far for the "Magnificent Seven" -- the group of megacap companies that includes Nvidia as well as Apple and Microsoft. Including estimates for Nvidia, the Magnificent 7 are on track to have increased earnings by 26% compared with 7% for the remaining 493 stocks in the index, the Goldman strategists said in a note. Nvidia is expected to post a 48% rise in earnings per share on revenue of $45.9 billion for its second fiscal quarter, according to LSEG data. Megacap tech companies focusing on AI have recently increased their estimates for capital spending, which should be favorable for Nvidia, said Paul Roach, portfolio manager at Allspring Global Investments. Nvidia's "commentary on the demand side... should be more bullish just because their largest customers have all kind of upped their capex guidance over the last few quarters," Roach said, adding that demand for Nvidia's products is also broadening beyond the largest tech companies Investors will also focus on U.S. economic data in the coming week, including on consumer sentiment and inflation. Despite the latest tech declines, the S&P 500 eked out a gain on the week and is up about 10% this year, around record-high levels. The Dow Jones Industrial Average notched a record high close on Friday. As tech shares fell this week, some investors rotated into other areas of the market that have not been as strong in recent weeks, such as healthcare and consumer staples . But major equity indexes will be hard-pressed to keep moving higher if tech falters, given its heavy presence in those indexes, Maley said. Tech is by far the largest of the S&P 500's 11 sectors, with a 33% weight. Nvidia alone has a nearly 8% weight in the index. "If these tech stocks continue to fall, that means the indexes will continue to fall," Maley said. "No way around it."

Are Nvidia stocks the single biggest factor behind S&P 500, US stock market's swing? Investors will be surprised to details

Nvidia has grown, swelling to a $4 trillion valuation last month, so has its weighting in the S&P 500. It now makes up almost 8 per cent of the index. Nvidia and Federal Reserve's announcement related to interest rate cut are perhaps the most pivotal factors that could trip up the runaway stock market. Chip producer Nvidia's financial report, which is scheduled to be released on Wednesday, is expected to produce the S&P's biggest one-day reaction over the next month. Nvidia Impact on US Stock Market As Nvidia has grown, swelling to a $4 trillion valuation last month, so has its weighting in the S&P 500. It now makes up almost 8 per cent of the index. The last time Nvidia reported earnings, in May, its stock rose 3.25 per cent and the S&P 500 rose 0.4 per cent. After reporting earnings in February, Nvidia sank more than 8 per cent and the S&P 500 dropped 1.6 per cent. Nvidia has led rivals in the race to dominate the high-powered chips used to power AI, and next week investors are looking for signs that the relentless demand for Nvidia's products will continue. The company's earnings could help answer another big question looming over the stock market: whether there is a bubble in AI, as some have speculated this week. Other large companies in the index, like Apple and Microsoft, are also tied to the AI theme, so Nvidia's financial results are likely to affect these other big stocks as well. "It's always a big deal," said Stacy Rasgon, an Nvidia analyst at Morningstar, joking that he had perhaps become "jaded" by the frequency of big moves in Nvidia's stock price. US Fed Impact on Wall Street On Friday, the Federal Reserve chair delivers a hotly anticipated speech at Jackson Hole in Wyoming. Not long after that, the Labor Department will release the latest update on hiring, and then there's an important reading on inflation. The forecast for that market move is reflected in recent options activity -- derivatives that give an investor the right to buy or sell a stock, or an index of stocks, at a future date for a preset price. Investors use options to make bets on the direction of the market and to protect against the potential for the market to move against them. According to S&P 500 options data from Citi Global Markets, investors are positioned for a 0.8-percentage-point move -- in either direction -- on Friday, depending on what the Fed chair, Jerome Powell, says in his speech at the central bank's annual conference at Jackson Hole. Prices for next Thursday -- the first chance investors have to react to Nvidia's earnings released the night before -- imply a move in the index of 0.9 percentage points in either direction. The Fed still looms large over financial markets, with policy decisions that can move markets around the world. But the fact that quarterly results from one technology company focused on artificial intelligence can match, in the view of equity investors, the impact of some of the most widely tracked economic data and central bank activity reflects the significant influence that a handful of behemoth tech companies have on today's stock market. "On a relative basis, Nvidia's earnings is the largest event for the S&P 500 for the next month," said Stuart Kaiser, an equity strategist at Citi. "For equity investors," he added, "particularly in the S&P 500, the AI theme, and the impact of that on returns, is on par with the Fed now." For comparison, when Powell spoke at Jackson Hole last year, the S&P 500 rose a little more than 1 per cent. The year before, his remarks were followed by a 0.7 per cent increase in the index. Powell's address this week could shift investors' expectations for monetary policy and cuts to interest rates, both of which are crucial inputs for modeling the path ahead for the economy and stock market. The Trump administration has repeatedly complained about the Federal Reserve's keeping rates elevated, calling on the central bank to lower them rapidly, which would probably make borrowing cheaper and accelerate the economy. It would also help President Donald Trump fulfill a campaign promise to bring interest rates down. So far, the Fed has resisted, warning that rapidly lowering interest rates risks heating up the economy at the wrong time, potentially stoking inflation and raising prices for consumers. Q1. Who is US Fed Chairman? A1. US Fed Chairman is Jerome Powell. Q2. What is valuation of Nvidia? A2. As Nvidia has grown, swelling to a $4 trillion valuation last month, so has its weighting in the S&P 500. It now makes up almost 8 per cent of the index. The last time Nvidia reported earnings, in May, its stock rose 3.25 per cent and the S&P 500 rose 0.4 per cent. After reporting earnings in February, Nvidia sank more than 8 per cent and the S&P 500 dropped 1.6 per cent.

Investors zero in on Nvidia results as US tech stocks waver

NEW YORK (Reuters) -A wobble in U.S. technology shares has raised the stakes for Nvidia Corp's quarterly results on Wednesday, with earnings from the semiconductor giant posing a crucial test for the scorching AI trade. The benchmark S&P 500 has pulled back this week from record levels, dragged lower by a roughly 3% drop so far this week in the heavyweight tech sector after a huge run for the group. Fueled by its dominant artificial intelligence (AI) products, Nvidia's massive share price gains have buoyed both the tech sector and the overall market in recent years. Last month, Nvidia became the first company to top $4 trillion in market value. Investors are now more "on edge" heading into Nvidia's results, said Matthew Maley, chief market strategist at Miller Tabak. "When the group goes down and the most important stock in the group reports earnings, that is going to have a bigger impact than usual," Maley said. Nvidia's stock has climbed about 30% so far in 2025, pushing its gain to over 1,400% since October 2022. The California-based company has epitomized the broader AI excitement that has driven up shares of a raft of tech companies and others involved in AI infrastructure such as power generation and cooling systems. "Nvidia is almost looked at as a proxy to what is happening in artificial intelligence," said Matt Orton, chief market strategist at Raymond James Investment Management. "There's definitely a read-through that happens to the broader AI trade, which has really been the main driver of the S&P 500's return this year." Analysts said possible reasons for recent tech stock weakness include cautionary AI industry developments, including comments from OpenAI CEO Sam Altman that investors may be getting overexcited about AI. Nvidia's results will close out a second-quarter U.S. corporate earnings season that has largely surpassed expectations and helped support equities. S&P 500 company earnings are on track to have climbed 12.9% from the year-earlier period, up from an expected 5.8% rise on July 1, according to LSEG IBES. Goldman Sachs strategists pointed to particular earnings strength so far for the "Magnificent 7" -- the group of megacap companies that includes Nvidia as well as Apple and Microsoft. Including estimates for Nvidia, the Magnificent 7 are on track to have increased earnings by 26% compared with 7% for the remaining 493 stocks in the index, the Goldman strategists said in a note. Nvidia is expected to post a 48% rise in earnings per share on revenue of $45.9 billion for its second fiscal quarter, according to LSEG data. Megacap tech companies focusing on AI have recently increased their estimates for capital spending, which should be favorable for Nvidia, said Paul Roach, portfolio manager at Allspring Global Investments. Nvidia's "commentary on the demand side... should be more bullish just because their largest customers have all kind of upped their capex guidance over the last few quarters," Roach said, adding that demand for Nvidia's products is also broadening beyond the largest tech companies ECONOMIC DATA Investors will also focus on U.S. economic data in the coming week, including on consumer sentiment and inflation. Despite the latest week's tech-driven declines, the S&P 500 remains up over 8% this year and stands less than 2% below its record closing high. As tech shares fell this week, some investors rotated into other areas of the market that have not been as strong in recent weeks, such as healthcare and consumer staples. But major equity indexes will be hard-pressed to keep moving higher if tech falters, given its heavy presence in those indexes, Maley said. Tech is by far the largest of the S&P 500's 11 sectors, with a 33% weight. Nvidia alone has a nearly 8% weight in the index. "If these tech stocks continue to fall, that means the indexes will continue to fall," Maley said. "No way around it." (Reporting by Lewis Krauskopf; Editing by David Gregorio)

Wall St Week Ahead-Investors zero in on Nvidia results as US tech stocks waver

NVIDIA Corporation is the world leader in the design, development, and marketing of programmable graphics processors. The group also develops associated software. Net sales break down by family of products as follows: - computing and networking solutions (77.8%): data center platforms and infrastructure, Ethernet interconnect solutions, high-performance computing solutions, platforms and solutions for autonomous and intelligent vehicles, solutions for enterprise artificial intelligence infrastructure, crypto-currency mining processors, embedded computer boards for robotics, teaching, learning and artificial intelligence development, etc.; - graphics processors (22.2%): for PCs, game consoles, video game streaming platforms, workstations, etc. (GeForce, NVIDIA RTX, Quadro brands, etc.). The group also offers laptops, desktops, gaming computers, computer peripherals (monitors, mice, joysticks, remote controls, etc.), software for visual and virtual computing, platforms for automotive infotainment systems and cloud collaboration platforms. Net sales break down by industry between data storage (78%), gaming (17.1%), professional visualization (2.5%), automotive (1.8%) and other (0.6%). Net sales are distributed geographically as follows: the United States (44.3%), Taiwan (22%), China (16.9%) and other (16.8%).