Nvidia's Earnings Beat Expectations, but AI Industry Faces New Challenges

Markets today: Nvidia helps prop up Wall Street, and indexes rise

NEW YORK -- Superstar stock Nvidia is helping to prop up the U.S. market on Thursday, and indexes are rising after a rough run. The S&P 500 was up 0.5% in early trading, coming off a painful stretch where weaker-than-expected reports on the U.S. economy knocked the index off its record set last week. The Dow Jones Industrial Average was up 139 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.7% higher. Nvidia, which has grown to become one of Wall Street's most influential stocks, helped support the market with a 0.6% gain. Even with that modest rise, it was still one of the strongest forces pushing upward on the S&P 500 because of its massive size, second only to Apple on Wall Street. Nvidia rose after delivering both profit and revenue for the latest quarter that topped analysts' expectations. Such a performance has become routine for the company, whose chips are powering the surge into artificial-intelligence technology, but this was Nvidia's first profit report since DeepSeek shook the entire AI industry. After the Chinese upstart said it developed a large language model that can compete with the world's best without using the most expensive chips, Wall Street had to question all the spending it assumed would go into Nvidia's chips and the ecosystem that's built around the AI boom, such as electricity to power large data centers. Nvidia's performance for the latest quarter, along with its forecasts for upcoming results, were "good enough to keep the debate moving in a positive direction," according to analysts at UBS led by Timothy Arcuri. That helped offset a 3.7% drop for Salesforce, which topped analysts' profit expectations for the latest quarter but gave forecasts for upcoming revenue and other financial measures that fell short. Also weighing on the market was President Donald Trump's latest announcement on tariffs. He said "the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled" for imports from Canada and Mexico. He also said he would add an additional 10% tariff on Chinese products on that date. Such tariffs could push up prices for U.S. households when inflation has already shown itself to be stubborn to ease. Wall Street has been mostly hoping that such threats are merely talk and leverage that Trump will use in negotiations with other countries before ultimately inflicting less pain on the economy than feared. But even if that were to happen, all the talk about tariffs by itself has been enough to get U.S. households to feel much more nervous about the economy and their finances. That's dangerous if it causes them to pull back on their spending, which has been one of the linchpins keeping the U.S. economy out of a recession. In the bond market, Treasury yields were ticking higher after initially oscillating following Trump's tariff announcement and a couple reports on the U.S. economy. One gave an updated estimate on how the economy performed during the last three months of 2024. It left alone the government's estimate for overall economic growth, which was solid, but it also raised its estimate for a measure of inflation during the quarter. A separate report said more U.S. workers applied for unemployment benefits last week. While the number is still nowhere close to where it's been in past recessions, it was still at a three-month high. The yield on the 10-year Treasury rose to 4.30% from 4.26% late Wednesday. In stock markets abroad, indexes were mixed across Europe and Asia. Germany's DAX lost 1%, while Japan's Nikkei 225 added 0.3%. ___

Markets today: A split widens on Wall Street as Nvidia and AI mania weaken

NEW YORK -- U.S. stock indexes are drifting Thursday, but the modest moves masked sharp swings under the market's surface as Wall Street's frenzy around artificial-intelligence technology lets up a bit more. The S&P 500 was 0.1% lower in midday trading. It's coming off a rough run where weaker-than-expected reports on the U.S. economy knocked the index off its record set last week. The Dow Jones Industrial Average was up 322 points, or 0.7%, as of 11 a.m. Eastern time, and the Nasdaq composite was 0.7% lower. Weighing most heavily on the S&P 500 was superstar stock Nvidia, which has grown to become one of Wall Street's most influential stocks. After initially rising at the open of trading following a better-than-expected profit report, Nvidia quickly slid to a loss of 4%. Better-than-expected profit reports have become routine for Nvidia, whose chips are powering the surge into artificial-intelligence technology, but this was the company's first since DeepSeek shook the entire AI industry. After the Chinese upstart said it developed a large language model that can compete with the world's best without using the most expensive chips, Wall Street had to question all the spending it assumed would go into Nvidia's chips and the ecosystem that's built around the AI boom, such as electricity to power large data centers. Nvidia's performance for the latest quarter, along with its forecasts for upcoming results, were "good enough to keep the debate moving in a positive direction," according to analysts at UBS led by Timothy Arcuri. But it apparently wasn't good enough to send Nvidia's stock higher, particularly given criticism that its price had already leaped too high, too quickly. After more than tripling two years ago, it more than doubled last year as its sales exploded. The market also soured on Salesforce, which fell 2.3% despite topping analysts' profit expectations for the latest quarter. Several analysts called the performance solid, and the company continued to tout its AI offerings, but it gave forecasts for upcoming revenue and other financial measures that fell short of expectations. C3.ai, meanwhile, sank 5.1% despite likewise topping analysts' forecasts for profit in the latest quarter. One AI-related company bucking the trend was Snowflake. The AI data cloud company rose 7.4% after delivering stronger profit and revenue for the latest quarter than analysts expected. It joined a wide range of stocks on the more staid end of Wall Street, ones that didn't grab as many headlines as AI-related companies in recent years. A 1.7% rise for Berkshire Hathaway, the company run by famed investor Warren Buffett, was one of the strongest forces pushing upward on the S&P 500. The owner of Geico, BNSF railroad and other businesses has built a hoard of unused cash recently. The could indicate Buffett, who's famous for buying stocks when prices are low, may not see much worth purchasing in a market that critics say looks too expensive. Gains of 2.1% for Visa and 2% for UnitedHealth Group were also strong forces pushing upward on the market. Apple was one of the few big tech stocks to rise, and it added 0.3%. In the bond market, Treasury yields swung up and down following President Donald Trump's latest announcement on tariffs. He said "the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled" for imports from Canada and Mexico. He also said he would add an additional 10% tariff on Chinese products on that date. Such tariffs could push up prices for U.S. households when inflation has already shown itself to be stubborn to ease. Wall Street has been hoping such threats are merely talk and leverage that Trump will use in negotiations with other countries before ultimately inflicting less pain on the economy than feared. But even if that were the case all the talk about tariffs has already been enough to get U.S. households to feel much more nervous about the economy and their finances. That's dangerous if it causes them to pull back on their spending, which has been one of the linchpins keeping the U.S. economy out of a recession. Such worries are pressuring the Federal Reserve, which has few if any tools to help an economy when economic growth is slowing and inflation is rising at the same time. It can cut interest rates when the economy and inflation are slowing, or it can raise rates when both are accelerating. Jeff Schmid, president of the Federal Reserve Bank of Kansas City, said in a speech Thursday that he has "become more cautious" in his hopes that inflation will continue to ease. He also said that discussions with people in his district suggest "elevated uncertainty might weigh on growth" for the economy. For now, at least, the U.S. economy appears to be in at least solid shape. The government on Thursday left alone its estimate for how the U.S. economy performed during the last three months of 2024, though it raised its estimate for a measure of inflation during the quarter. A separate report said more U.S. workers applied for unemployment benefits last week. While the number is at a three-month high, it is still nowhere close to where it's been in past recessions. The yield on the 10-year Treasury rose to 4.28% from 4.26% late Wednesday. It was as high as 4.30% earlier in the morning. In stock markets abroad, indexes were mixed across Europe and Asia. Germany's DAX lost 1.2%, while Japan's Nikkei 225 added 0.3%. ___

Nasdaq futures lead gains as Nvidia results ease AI demand fears

Feb 26 (Reuters) - U.S. stock index futures rose on Thursday as AI bellwether Nvidia's upbeat forecast soothed concerns of cooling demand in the industry, while investors gauged the implications of the Trump administration's latest threats on global trade. Nvidia (NVDA.O), opens new tab added less than 1% in choppy premarket trading, far tamer than some of the stock's previous post-results surges, as the company's revenue growth slowed further. "It's telling that Nvidia's latest set of results beat earnings expectations for the ninth quarter in a row and failed to win over the market," said Dan Coatsworth, investment analyst at AJ Bell. Fellow chip stocks Broadcom (AVGO.O), opens new tab added 2.1% and Advanced Micro Devices (AMD.O), opens new tab gained 1%, while megacaps Microsoft (MSFT.O), opens new tab and Meta (META.O), opens new tab rose 0.4% and 1.4%, respectively. The launch of low-cost AI models from China's DeepSeek in January had paused a two-year, tech-driven bull rally on Wall Street, with Nvidia losing half a trillion dollars in market value in a single day. More recently, an analyst report suggesting Microsoft was scrapping some data center leases also raised concerns of overcapacity. "The prospect of being able run AI services more cheaply, together with growing uncertainties around the economic outlook, mean companies will be paying more attention to tech-related spending," Coatsworth said. At 05:20 a.m. ET, Dow E-minis were up 112 points, or 0.26%, S&P 500 E-minis were up 33.5 points, or 0.56%, and Nasdaq 100 E-minis were up 136.75 points, or 0.65%. All three major U.S. indexes were on track for monthly declines, as the Trump administration's global trade policies and signs of stalling economic growth have also fueled aversion to riskier assets. In his latest threats on trade partners, U.S. President Donald Trump floated a 25% "reciprocal" tariff on European cars and other goods. But he sowed confusion on the timeline of Mexican and Canadian duties after he said they could take effect on April 2, while a White House official said the previous March 4 deadline remained in effect. On the data front, second estimates for quarterly gross domestic product and a report on weekly jobless claims are due at 8:30 a.m. ET. Monthly Personal Consumption Expenditure data, the Federal Reserve's preferred inflation gauge, is due on Friday and likely to determine the outlook for monetary policy easing this year. According to data compiled by LSEG, traders expect the central bank to lower borrowing costs by at least 50 basis points by December. Comments from policymakers including Thomas Barkin, Jeffrey Schmid, Fed Vice Chair for Supervision Michael Barr and Governor Michelle Bowman are expected to reiterate the central bank's cautious stance on easing interest rates further. Dow component Salesforce (CRM.N), opens new tab forecast fiscal 2026 revenue below expectations, sending shares of the business software provider down 4.7%. Snowflake (SNOW.N), opens new tab rose 10.7% after the data analytics provider forecast fiscal 2026 product revenue above analysts' estimates. Moderna (MRNA.O), opens new tab dropped 3.3% after a report said U.S. health officials are reevaluating a $590 million contract that was awarded to the drugmaker for the development of its bird flu vaccine. Reporting by Sukriti Gupta and Johann M Cherian in Bengaluru; Editing by Devika Syamnath Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:U.S. Markets

Nasdaq futures lead gains as Nvidia results ease AI demand fears

(Reuters) - U.S. stock index futures rose on Thursday as AI bellwether Nvidia's upbeat forecast soothed concerns of cooling demand in the industry, while investors gauged the implications of the Trump administration's latest threats on global trade. Nvidia added less than 1% in choppy premarket trading, far tamer than some of the stock's previous post-results surges, as the company's revenue growth slowed further. "It's telling that Nvidia's latest set of results beat earnings expectations for the ninth quarter in a row and failed to win over the market," said Dan Coatsworth, investment analyst at AJ Bell. Fellow chip stocks Broadcom added 2.1% and Advanced Micro Devices gained 1%, while megacaps Microsoft and Meta rose 0.4% and 1.4%, respectively. The launch of low-cost AI models from China's DeepSeek in January had paused a two-year, tech-driven bull rally on Wall Street, with Nvidia losing half a trillion dollars in market value in a single day. More recently, an analyst report suggesting Microsoft was scrapping some data center leases also raised concerns of overcapacity. "The prospect of being able run AI services more cheaply, together with growing uncertainties around the economic outlook, mean companies will be paying more attention to tech-related spending," Coatsworth said. At 05:20 a.m. ET, Dow E-minis were up 112 points, or 0.26%, S&P 500 E-minis were up 33.5 points, or 0.56%, and Nasdaq 100 E-minis were up 136.75 points, or 0.65%. All three major U.S. indexes were on track for monthly declines, as the Trump administration's global trade policies and signs of stalling economic growth have also fueled aversion to riskier assets. In his latest threats on trade partners, U.S. President Donald Trump floated a 25% "reciprocal" tariff on European cars and other goods. But he sowed confusion on the timeline of Mexican and Canadian duties after he said they could take effect on April 2, while a White House official said the previous March 4 deadline remained in effect. On the data front, second estimates for quarterly gross domestic product and a report on weekly jobless claims are due at 8:30 a.m. ET. Monthly Personal Consumption Expenditure data, the Federal Reserve's preferred inflation gauge, is due on Friday and likely to determine the outlook for monetary policy easing this year. According to data compiled by LSEG, traders expect the central bank to lower borrowing costs by at least 50 basis points by December. Comments from policymakers including Thomas Barkin, Jeffrey Schmid, Fed Vice Chair for Supervision Michael Barr and Governor Michelle Bowman are expected to reiterate the central bank's cautious stance on easing interest rates further. Dow component Salesforce forecast fiscal 2026 revenue below expectations, sending shares of the business software provider down 4.7%. Snowflake rose 10.7% after the data analytics provider forecast fiscal 2026 product revenue above analysts' estimates. Moderna dropped 3.3% after a report said U.S. health officials are reevaluating a $590 million contract that was awarded to the drugmaker for the development of its bird flu vaccine. (Reporting by Sukriti Gupta and Johann M Cherian in Bengaluru; Editing by Devika Syamnath)

Nasdaq leads Wall St higher as Nvidia results grab focus

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.) * Intuit gains after forecasting Q3 revenue above estimates * GM rises on $6 billion buyback, higher dividend plan * Super Micro surges after filing delayed FY, quarterly reports * Indexes up: Dow 0.28%, S&P 500 0.71%, Nasdaq 1.11% Feb 26 (Reuters) - The tech-heavy Nasdaq led Wall Street's main indexes higher on Wednesday as chip stocks rebounded ahead of Nvidia's results that are crucial to illuminating future demand for AI. At 11:31 a.m. ET, the Dow Jones Industrial Average rose 122.51 points, or 0.28%, to 43,743.67, the S&P 500 gained 42.56 points, or 0.71%, to 5,997.81 and the Nasdaq Composite gained 211.83 points, or 1.11%, to 19,238.21. Eight of the S&P 500's 11 sectors traded higher, with technology stocks rising 1.8%. AI chip leader Nvidia gained 4.4%, while peers Broadcom and Advanced Micro Devices also rose, driving the broader semiconductor index 2.6% higher. Nvidia's quarterly results and forecasts, expected after markets close, are likely to set the tone for artificial intelligence stocks that have dominated Wall Street. The launch of low-cost AI models from China's DeepSeek had rattled the industry in January and raised questions around Big Tech's heavy investments into the technology. "(Nvidia's) been the bellwether of this bull market... but (what's) fundamentally shifted is this assumption that the only companies that will win and dominate generative AI themes are the 'Magnificent Seven'," said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. "What the DeepSeek news reminds everybody is, that's not how technology revolutions work." Megacaps were mixed, with Meta Platforms up 3% and Apple down 2%. Tesla rose 1.2% a day after the electric-vehicle maker's market value fell below $1 trillion. Super Micro jumped 19.6% after the chip company filed long-delayed annual and quarterly reports. Since last week, a series of data releases, including Tuesday's weak consumer sentiment print, has hinted that the world's largest economy might be stalling despite inflation remaining high, keeping investors on the edge. The S&P 500 and the Nasdaq logged their biggest four-day declines since September on Tuesday, also due to weakness in tech stocks, after an analyst report hinted at overcapacity in AI infrastructure. Wall Street's main indexes were also on track for monthly declines, with the Nasdaq poised for its worst drop in ten months. However, a Reuters poll showed strategists still expect the S&P 500 to finish 2025 about 9% higher than current levels, although market volatility will persist. On the fiscal front, President Donald Trump's $4.5 trillion tax-cut and border security agenda will be sent to the U.S. Senate after passing the Republican-controlled House of Representatives. Traders expect the Fed to deliver its first interest rate cut in July, according to data compiled by LSEG. In the latest on global trade, Trump ordered a probe into potential new tariffs on copper imports, sending prices of the red metal higher. Phoenix-based copper miner Freeport-McMoran jumped 5.2%. General Motors rose 5.4% as the automaker said it would increase its quarterly dividend by 25% and undertake a new $6 billion share buyback program. Intuit shares rose 13.3% after the TurboTax maker forecast third-quarter revenue above Street estimates. Advancing issues outnumbered decliners by a 2.01-to-1 ratio on the NYSE and by a 2.06-to-1 ratio on the Nasdaq. The S&P 500 posted 17 new 52-week highs and one new low while the Nasdaq Composite recorded 30 new highs and 110 new lows. (Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath)

Wall St set for higher open with spotlight on Nvidia results

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.) * Intuit gains after forecasting Q3 revenue above estimates * GM rises on $6 billion buyback, higher dividend plan Feb 26 (Reuters) - Wall Street's main indexes were set to open higher on Wednesday, after logging several days of declines, as investors awaited Nvidia's results to gauge the direction of AI demand and focused on a crucial tax-cut proposal's progress through Congress. At 08:29 a.m. ET, Dow E-minis were up 120 points, or 0.27%, S&P 500 E-minis were up 32.25 points, or 0.54% and Nasdaq 100 E-minis were up 172.25 points, or 0.81%. Investors have been on edge since last week as a series of data releases, including Tuesday's weak consumer sentiment print, suggested the world's largest economy might be stalling, even as sticky inflation keeps the Federal Reserve cautious about lowering interest rates further. Nvidia's quarterly results and forecasts, expected after markets close, are likely to set the tone for artificial intelligence stocks that have dominated Wall Street. The launch of low-cost AI models from China's DeepSeek had rattled the industry in January and raised questions around Big Tech's heavy investments into the technology. The benchmark S&P 500 and the Nasdaq logged their biggest four-day declines since September on Tuesday, mainly due to weakness in tech stocks, as an analyst report also hinted at overcapacity in AI infrastructure. Nvidia shares gained 2.9% in premarket trading, while peers Broadcom and Advanced Micro Devices added 2.8% and 1.3%, respectively. "The demand for their chips remains very, very high but unfortunately, investor expectations might be even higher," said Sam Stovall, chief investment strategist at CFRA Research. Megacaps such as Amazon.com and Alphabet rose over 1% each, while Tesla gained 1.7%, a day after the electric-vehicle maker's market value fell below $1 trillion. A Reuters poll showed strategists still expect the S&P 500 to finish 2025 about 9% higher than current levels, although market volatility will persist. On the fiscal front, President Donald Trump's $4.5 trillion tax-cut and border security agenda will be sent to the U.S. Senate after passing the Republican-controlled House of Representatives. "Keeping the tax cuts is what... many on Wall Street want, because should the tax rates revert, then that would end up taking more money out of the system," Stovall said. However, given broader economic uncertainty, futures tracking the domestically-focused Russell 2000 index inched up 0.5%, while yields on Treasury bonds recouped some of Tuesday's declines. Traders expect the Fed to deliver its first interest rate cut in July, according to data compiled by LSEG. Remarks from policymakers Thomas Barkin and Raphael Bostic, due later in the day, are likely to reiterate the central bank's cautious stance. In the latest on global trade, Trump ordered a probe into potential new tariffs on copper imports, sending prices of the red metal higher. Phoenix-based copper miner Freeport-McMoran jumped 4.7%. Lowe's added 3.5% after the retailer reported a surprise rise in fourth-quarter same-store sales. Intuit shares rose 8.2% after the TurboTax maker forecast third-quarter revenue above Street estimates. General Motors rose 3.3% as the automaker said it would increase its quarterly dividend by 25% and undertake a new $6 billion share buyback program. (Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru; Editing by Devika Syamnath)

Nvidia results offer window into AI spending

A look at the day ahead in European and global markets from Rae Wee Quarterly earnings from AI darling Nvidia is Wednesday's marquee event for markets, with much riding on the chipmaker to deliver results that could placate investors who are questioning hefty spending in artificial intelligence. Investors have begun second-guessing U.S. tech giants since Chinese startup DeepSeek rattled the industry with AI technology ostensibly cheaper yet as capable as that of early leaders. Market estimates have Nvidia's fourth-quarter sales at $38.5 billion and first-quarter guidance around $42.5 billion. As usual, options point to a share price move of around 8% in either direction should the results surprise. "This earnings report isn't just about Nvidia... It's about whether the AI revolution can maintain its breakneck pace," said Saxo's global head of investment strategy, Jacob Falkencrone. Alleviating concern of DeepSeek triggering a slide in AI chip demand, sources have told Reuters of Chinese companies increasing orders for Nvidia's H20 chip due to booming demand for low-cost AI models. DeepSeek itself is accelerating the launch of the successor to the R1 model that put the startup on the map last month, three people familiar with the company told Reuters. R2 is likely to worry the U.S. government which regards AI leadership as a national priority. That country's technology war with China is set to intensify with the administration of President Donald Trump planning tougher restrictions on semiconductor exports to China. Trump has already signed a memorandum restricting Chinese investment in the U.S. in strategic areas. Over in China, a government official on Wednesday said Taiwan sought to give the island's semiconductor industry to the U.S. as a "souvenir" for use as leverage when seeking support from Washington. Still, investors seemed to have brushed off escalating tension for now. The share prices of Hong Kong-listed companies jumped 2.5% on Wednesday with technology stocks surging 3.7%, having declined in the previous session. Shares in mainland China similarly rose. [.SS] Elsewhere, U.S. Treasury yields rebounded from their weakest level in months after the Republican-controlled U.S. House of Representatives advanced Trump's $4.5 trillion tax-cut plan, giving his 2025 priorities a major boost. A darkening economic outlook continued to linger in investor minds as they increased bets of more interest rate cuts this year from the Federal Reserve. Fed funds futures point to more than 50 basis points worth of easing priced in by year-end, up from about 40 bps a week ago. That in turn undermined the dollar on Wednesday. Key developments that could influence markets on Wednesday: * Nvidia earnings * Federal Reserve's Tom Barkin, Raphael Bostic speak

U.S. stock futures point higher ahead of much-anticipated Nvidia earnings By Investing.com

Investing.com - U.S. stock futures ticked higher on Wednesday as investors geared up for quarterly earnings from artificial intelligence-darling Nvidia (NASDAQ:NVDA). By 06:37 ET (11:37 GMT), the Dow futures contract had edged up by 134 points or 0.3%, S&P 500 futures had gained 31 points or 0.5%, and Nasdaq 100 futures had increased by 166 points or 0.8%. The benchmark S&P 500 and tech-heavy Nasdaq Composite both slipped in the previous session, while the 30-stock Dow Jones Industrial Average inched up by 160 points or 0.4%. Traders were assessing fresh economic data which showed a deterioration in U.S. consumer confidence and suggested that households were fretting over the potential impact on inflation of President Donald Trump's import tariff plans. Traders are now shifting their focus to fourth-quarter results from Nvidia, the semiconductor titan that has often been viewed as a figurehead of a surge in enthusiasm around the capabilities of AI. Nvidia, which designs chips that are considered to be integral parts of AI applications, is due to report after U.S. markets close. Executives will likely face questions from analysts about the implications of the recent emergence of a low-cost AI model from Chinese start-up DeepSeek, which raised major questions over the sustainability and eventual returns from massive AI investments by mega-cap U.S. technology companies. The market ructions caused by DeepSeek hit Nvidia particularly hard, with the stock shedding $593 billion in value in a single session in late January -- the worst one-day loss in Wall Street history. Nvidia is tipped to post overall fourth-quarter revenue of $38.25 billion, including $34.06 billion in sales at its crucial data center business, according to Bloomberg consensus estimates. For the first quarter, the company is expected to guide for a top-line total of $42.26 billion. In individual stocks, shares in Super Micro Computer (NASDAQ:SMCI) surged in premarket trading after the company filed its delayed financial reports. The filings will keep the group compliant with Nasdaq index requirements. Lowe's (NYSE:LOW) reported fourth-quarter adjusted earnings per share that topped consensus estimates, as the home improvement chain said it was boosted by its strategy to increase market share by selling to both retail and professional customers. Shares in the group rose prior to the opening bell. Workday (NASDAQ:WDAY) shares spiked more than 12% in premarket trading on Wednesday after the AI-powered enterprise management platform reported fourth-quarter earnings and revenue that exceeded analyst expectations, while also providing robust guidance for the upcoming fiscal year. Elsewhere, oil prices were subdued after touching two-month lows in the prior session. Traders were looking out for official U.S. stockpile data later on Wednesday. Gold prices hovered around the flatline after pulling back from recent record highs, although safe-haven demand remained high in the face of uncertainty over U.S. tariffs and sluggish growth. Meanwhile, Bitcoin was trading near a three-month low, as these wider worries over trade and economic activity fueled risk-averse moves across cryptocurrencies.

Nvidia's AI Reckoning

Investors are bracing for Nvidia's latest earnings report, which is poised to reveal the current appetite for AI technologies. The U.S. political landscape is impacting markets, with the House endorsing President Trump's substantial tax cuts and border policies, while consumer confidence wanes under inflation fears and potential new tariffs. Investors are on the edge of their seats, eagerly awaiting Nvidia's earnings report. Why? Because it's like the Oscars for AI technologies. Will Nvidia's AI demand be the blockbuster hit of the season, or will it flop like a bad sequel? Meanwhile, over in China, DeepSeek has rolled out budget-friendly AI models, shaking up the tech industry. In the United States, the House of Representatives has given a thumbs-up to President Donald Trump's $4.5 trillion tax-cut and border security agenda. It's now waiting for the Senate's nod of approval. This has lifted investor spirits, even as they navigate the murky waters of economic uncertainty. But not all is rosy. U.S. consumer confidence has taken a nosedive, the steepest in 3.5 years, thanks to inflation worries and the looming threat of new tariffs on copper imports. President Trump is on the case, ordering an investigation into these potential tariffs to boost U.S. production for electric vehicles and military hardware. Meanwhile, the U.S. and Ukraine have agreed on a draft minerals deal to help resolve the conflict with Russia. And in the world of U.S. Treasury yields, the 10-year yield has dipped below 4.3% for the first time this year. The slide in U.S. tech stocks was evident yesterday, marking the fourth straight day of declines. The Nasdaq 100 has erased all its February gains, hovering near zero for 2025 with a modest increase of just 0.36%. Stocks linked to artificial intelligence are clearly losing momentum, with Nvidia dropping 2.8% yesterday and down 5.7% for the year. Cryptocurrency stocks are also faltering, as evidenced by MicroStrategy's 11% decline. Meanwhile, Tesla, the car company that seems to have forgotten it sells cars, isn't faring much better, down 8.4%. The so-called "magnificent seven" -- Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta, and Tesla -- have collectively shed over 10% from their December highs, a threshold Wall Street dubs a "correction." In contrast, the Dow Jones is seizing the moment to stage a comeback, rising 0.4%. This is largely thanks to a trio of companies that harken back to a pre-digital era: Walmart, The Home Depot, and Sherwin-Williams, each boasting gains of more than 2.5% yesterday. The recent downturn in major American stocks can be attributed to a mix of challenges: While some factors might seem temporary, they have the potential to become recurring, or even permanent fixtures in the market landscape. Yet, each comes with its own caveat. In the Asia-Pacific region this morning, caution still prevails in Japan (-0.4%) and to a lesser extent in Australia (-0.1%). China is rebounding, quite strongly even in Hong Kong (+3.2%). Taiwan, South Korea and India are showing moderate growth. European indices and Wall Street futures are dark green after the agreement between the United States and Ukraine. Today's economic highlights: Today's schedule includes: consumer confidence in France; in the United States, building permits, new home sales, GM new home sales, and DOE crude stocks. See the full calendar here.

Wall St Week Ahead Nvidia to offer AI trades reality check

NEW YORK, Feb 21 (Reuters) - Nvidia's (NVDA.O), opens new tab profit report next week could steer the U.S. stock market's course, as investors seek confirmation that the AI-driven investment trend, which has powered equities for two years, is intact after last month's panic-selling triggered by the Chinese startup DeepSeek. Seen as a bellwether of the burgeoning AI industry, Nvidia is the world's second most valuable company, with a 6.3% weight on the S&P 500 (.SPX), opens new tab, according to LSEG. Its shares have skyrocketed over 550% over the last two years. A recent stumble, however, came after the Chinese startup DeepSeek unveiled a lower-cost AI model that was seen as a threat to the dominance of U.S. rivals, driving Nvidia down roughly 17% on January 27, equivalent to $593 billion - a record one-day market value loss. Shares have almost fully recovered from the tumble and the company said DeepSeek's advances prove the need for more of its chips, but apprehensive investors fear earnings could revive some market turbulence. "It's a tough setup going into the conference call next week because there is some anxiety of wanting to kind of call the top on Nvidia. So I would not be surprised to see rotation and fairly violent market reaction under any circumstance," said Mike Smith, Allspring's head of growth equity team. He said investors could rotate out of AI trades into sectors such as healthcare, software and financials. Nvidia options imply a 7.7% swing for the shares in either direction following the results, in line with the stock's average move of 7.6% on the day after results over the last 12 quarters, according to data from options analytics service ORATS. With the AI chipmaker's market capitalization hovering around $3.4 trillion, the options-implied stock move equates to a market value swing of about $260 billion, roughly the size of Wells Fargo (WFC.N), opens new tab. Nvidia is expected to post on February 26 a fourth-quarter profit of $20.89 billion, driven by a roughly 72% rise in revenues from a year earlier, LSEG data showed. With good fourth-quarter numbers on their way, all eyes will be on the guidance Nvidia provides for both supply and demand for its chips to justify its own rich valuation, as well as the sector's outlook. Nvidia recently traded at about 32 times forward 12-month earnings estimates, down from about 40 in early November, according to LSEG Datastream. The S&P 500 trades at 22 times forward earnings. "Nvidia is the last piece of the market puzzle right now that might help reset investor sentiment," said Matt Orton, chief market strategist at Raymond James Investment Management, adding the equities market has performed well despite uncertainties around U.S. tariff and fiscal policy, a drop in retail sales and a hotter-than-expected consumer price index. "It can be the catalyst to help the market break out once again," he said. Markets have changed since the selloff triggered by DeepSeek, as Nvidia has lost a lot of its power to move all stocks since the beginning of this year. The correlation between the chipmaker and the S&P 500 fell to 30% in 2025 from 71% last year, according to Schwab's calculations. Still it does not mean stocks are bulletproof in case the bellwether Nvidia disappoints. "It's important to separate the difference between the psychological effects of Nvidia on the market from the statistical effect. To me, it is more of a psychological move," said Joe Mazzola, Schwab's head trading and derivatives strategist. Investors will also be watching next week's release of U.S. inflation numbers for January, especially after data last month showed that inflation increased by the most in eight months in December, amid robust consumer spending on goods and services. Hotter-than-expected inflation data would probably prompt the Fed to wait longer to cut interest rates. Reporting by Carolina Mandl; additional reporting by Saqib Ahmed in New York; Editing by Lisa Shumaker Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Wall St week ahead: Nvidia to offer AI trades reality cheWall St week aheadck

Nvidia's upcoming profit report could significantly impact the U.S. stock market, as it will confirm the stability of the AI-driven investment trend. Despite a recent setback due to the emergence of Chinese startup DeepSeek, Nvidia's shares have almost recovered. Investors are keenly awaiting the company's earnings and future guidance to gauge the market's direction.Nvidia's profit report next week could steer the U.S. stock market's course, as investors seek confirmation that the AI-driven investment trend, which has powered equities for two years, is intact after last month's panic-selling triggered by the Chinese startup DeepSeek. Seen as a bellwether of the burgeoning AI industry, Nvidia is the world's second most valuable company, with a 6.3% weight on the S&P 500, according to LSEG. Its shares have skyrocketed over 550% over the last two years. A recent stumble, however, came after the Chinese startup DeepSeek unveiled a lower-cost AI model that was seen as a threat to the dominance of U.S. rivals, driving Nvidia down roughly 17% on January 27, equivalent to $593 billion - a record one-day market value loss. Shares have almost fully recovered from the tumble and the company said DeepSeek's advances prove the need for more of its chips, but apprehensive investors fear earnings could revive some market turbulence. "It's a tough setup going into the conference call next week because there is some anxiety of wanting to kind of call the top on Nvidia. So I would not be surprised to see rotation and fairly violent market reaction under any circumstance," said Mike Smith, Allspring's head of growth equity team. He said investors could rotate out of AI trades into sectors such as healthcare, software and financials. Nvidia options imply a 7.7% swing for the shares in either direction following the results, in line with the stock's average move of 7.6% on the day after results over the last 12 quarters, according to data from options analytics service ORATS. With the AI chipmaker's market capitalization hovering around $3.4 trillion, the options-implied stock move equates to a market value swing of about $260 billion, roughly the size of Wells Fargo. Nvidia is expected to post on February 26 a fourth-quarter profit of $20.89 billion, driven by a roughly 72% rise in revenues from a year earlier, LSEG data showed. With good fourth-quarter numbers on their way, all eyes will be on the guidance Nvidia provides for both supply and demand for its chips to justify its own rich valuation, as well as the sector's outlook. Nvidia recently traded at about 32 times forward 12-month earnings estimates, down from about 40 in early November, according to LSEG Datastream. The S&P 500 trades at 22 times forward earnings. "Nvidia is the last piece of the market puzzle right now that might help reset investor sentiment," said Matt Orton, chief market strategist at Raymond James Investment Management, adding the equities market has performed well despite uncertainties around U.S. tariff and fiscal policy, a drop in retail sales and a hotter-than-expected consumer price index. "It can be the catalyst to help the market break out once again," he said. Markets have changed since the selloff triggered by DeepSeek, as Nvidia has lost a lot of its power to move all stocks since the beginning of this year. The correlation between the chipmaker and the S&P 500 fell to 30% in 2025 from 71% last year, according to Schwab's calculations. Still it does not mean stocks are bulletproof in case the bellwether Nvidia disappoints. "It's important to separate the difference between the psychological effects of Nvidia on the market from the statistical effect. To me, it is more of a psychological move," said Joe Mazzola, Schwab's head trading and derivatives strategist. Investors will also be watching next week's release of U.S. inflation numbers for January, especially after data last month showed that inflation increased by the most in eight months in December, amid robust consumer spending on goods and services. Hotter-than-expected inflation data would probably prompt the Fed to wait longer to cut interest rates. (Reporting by Carolina Mandl; additional reporting by Saqib Ahmed in New York; Editing by Lisa Shumaker)

Morning Bid: Nvidia results offer window into AI spending

A look at the day ahead in European and global markets from Rae Wee Quarterly earnings from AI darling Nvidia (NVDA.O), opens new tab is Wednesday's marquee event for markets, with much riding on the chipmaker to deliver results that could placate investors who are questioning hefty spending in artificial intelligence. Investors have begun second-guessing U.S. tech giants since Chinese startup DeepSeek rattled the industry with AI technology ostensibly cheaper yet as capable as that of early leaders. Market estimates have Nvidia's fourth-quarter sales at $38.5 billion and first-quarter guidance around $42.5 billion. As usual, options point to a share price move of around 8% in either direction should the results surprise. "This earnings report isn't just about Nvidia... It's about whether the AI revolution can maintain its breakneck pace," said Saxo's global head of investment strategy, Jacob Falkencrone. Alleviating concern of DeepSeek triggering a slide in AI chip demand, sources have told Reuters of Chinese companies increasing orders for Nvidia's H20 chip due to booming demand for low-cost AI models. DeepSeek itself is accelerating the launch of the successor to the R1 model that put the startup on the map last month, three people familiar with the company told Reuters. R2 is likely to worry the U.S. government which regards AI leadership as a national priority. That country's technology war with China is set to intensify with the administration of President Donald Trump planning tougher restrictions on semiconductor exports to China. Trump has already signed a memorandum restricting Chinese investment in the U.S. in strategic areas. Over in China, a government official on Wednesday said Taiwan sought to give the island's semiconductor industry to the U.S. as a "souvenir" for use as leverage when seeking support from Washington. Still, investors seemed to have brushed off escalating tension for now. The share prices of Hong Kong-listed companies (.HSI), opens new tab jumped 2.5% on Wednesday with technology stocks (.HSTECH), opens new tab surging 3.7%, having declined in the previous session. Shares in mainland China similarly rose. Elsewhere, U.S. Treasury yields rebounded from their weakest level in months after the Republican-controlled U.S. House of Representatives advanced Trump's $4.5 trillion tax-cut plan, giving his 2025 priorities a major boost. A darkening economic outlook continued to linger in investor minds as they increased bets of more interest rate cuts this year from the Federal Reserve. Fed funds futures point to more than 50 basis points worth of easing priced in by year-end, up from about 40 bps a week ago. That in turn undermined the dollar on Wednesday. Key developments that could influence markets on Wednesday: Nvidia earningsFederal Reserve's Tom Barkin, Raphael Bostic speak By Rae Wee; Editing by Christopher Cushing Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:European Markets

Aftering waiting with bated breath, Wall Street absorbs Nvidia's latest earnings

Nvidia Corp. signage outside the company's headquarters in Santa Clara, Calif.,, on Nov. 19, 2024.David Paul Morris / Bloomberg via Getty Images file Rarely has a single company's earnings report been so closely watched by Wall Street as a make-or-break moment for the broader market. Nvidia, the chipmaker whose central role in the global AI arms race has turned it into one of the world's most valuable companies, reported its much-anticipated quarterly results Wednesday. The company is wildly profitable, but its financials have taken on a role well beyond the future of its operations. Although the latest earnings and sales figures beat estimates from industry analysts -- including a hefty $39.3 billion in revenues, an increase of 78% for the quarter ended in January -- the intrigue only starts there. Corporate earnings include forward-looking statements from companies seeking to manage expectations, and Nvidia's signaled slowing profit-margin growth. Nvidia's importance is due to two major factors: Its sizable valuation (meaning that its stock price can weigh heavily on the market as a whole, including the blue-chip Dow Jones Industrial Average) and its role in the AI sector (which has taken on a major role in broader U.S. economic growth). Ahead of the earnings, Dan Ives, a managing director and senior equity research analyst at Wedbush Securities, said it would be a "massive day" for global markets looking to "gauge the demand trajectory of the AI Revolution..." Among X's more finance- and tech-focused crowd, the earnings had caused enough anticipation to spark some tongue-in-cheek jokes. As if to underscore just how on edge traders were, Nvidia's stock price swung higher and then lower and then higher again in the minutes right after the report came out. As of about 5 p.m. ET, the shares were up about 2% from where they closed Wednesday. Nvidia's graphics processing unit (GPU) chips have been purchased by the heap by brand-name tech firms looking to build out their artificial intelligence capabilities. Between the start of 2023 and the end of 2024, Nvidia stock climbed some 880%, making it, at the time, the most valuable publicly traded U.S. firm, with a market cap over $3 trillion. Thanks to that surge, it is now the second-most-important component of the S&P 500 index, behind only Apple. Nvidia's earnings are heavily scrutinized as a barometer for the economy at large, the growth of which during the past two years has been powered in large part by investments in building out AI and data center capacity. Yet so far this year, Nvidia shares were down 5% heading into its earnings report amid growing doubts about whether the breakneck pace of global AI investment could be sustained. This week, a report emerged that Microsoft, one of Nvidia's largest customers, was pulling back on its data-center spending. Microsoft has since denied those reports -- and many of Nvidia's other key customers, including Google parent Alphabet, Facebook parent Meta, and Amazon all plan to make significant investments. Nvidia, and the AI landscape in general, has also been shaken by the seemingly sudden rise of DeepSeek, a China-backed AI platform that reportedly requires far fewer computing resources -- and mostly taps chips made by Nvidia rival Intel. More broadly, the U.S. economy is showing signs of a slowdown amid questions about the strength of consumers and the prospect of higher inflation tied to President Donald Trump's plans to impose tariffs.

Why Nvidia's Earnings Are Important to the Entire U.S. Stock Market

LOS ANGELES (AP) -- Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results Wednesday, with analysts eyeing future demand amid a Chinese upstart's claim that it can train competitive AI models using far fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion, according to FactSet. The company's net income is expected to reach $19.58 billion. What happens with Nvidia matters for the entire U.S. stock market. The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. The tech giant, based in Santa Clara, California, is now worth over $3 trillion. Nvidia and other companies benefiting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week. Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the U.S. economy from tariffs and other policies of President Donald Trump. Nvidia alone accounted for more than a fifth of all of the S&P 500 index's total return last year. None of the other 499 companies in the index came close. If Nvidia can't keep up its momentum, particularly when critics say its stock price has climbed too much and too quickly, Americans holding S&P 500 index funds in their 401(k) and other investing accounts could be set for pain. The fourth-quarter earnings will be the company's first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other U.S. rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data. The frenzy over DeepSeek caused $595 billion in Nvidia's wealth to briefly vanish. But the company in a statement commended DeepSeek's work as "an excellent AI advancement" that leveraged "widely-available models and compute that is fully export control compliant." Nvidia had carved out an early lead in the AI applications race, partly because of founder and CEO Jensen Huang's successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia's invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday. -- -- Associated Press writer Stan Choe contributed to this report. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Why Nvidia's earnings are important to the entire U.S. stock market

LOS ANGELES -- Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results Wednesday, with analysts eyeing future demand amid a Chinese upstart's claim that it can train competitive AI models using far fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion, according to FactSet. The company's net income is expected to reach $19.58 billion. What happens with Nvidia matters for the entire U.S. stock market. The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. The tech giant, based in Santa Clara, California, is now worth over $3 trillion. Nvidia and other companies benefiting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week. Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the U.S. economy from tariffs and other policies of President Donald Trump. Nvidia alone accounted for more than a fifth of all of the S&P 500 index's total return last year. None of the other 499 companies in the index came close. If Nvidia can't keep up its momentum, particularly when critics say its stock price has climbed too much and too quickly, Americans holding S&P 500 index funds in their 401(k) and other investing accounts could be set for pain. The fourth-quarter earnings will be the company's first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other U.S. rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data. The frenzy over DeepSeek caused $595 billion in Nvidia's wealth to briefly vanish. But the company in a statement commended DeepSeek's work as "an excellent AI advancement" that leveraged "widely-available models and compute that is fully export control compliant." Nvidia had carved out an early lead in the AI applications race, partly because of founder and CEO Jensen Huang's successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia's invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday. -- --

Why Nvidia's earnings are important to the entire U.S. stock market

LOS ANGELES (AP) -- Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results Wednesday, with analysts eyeing future demand amid a Chinese upstart's claim that it can train competitive AI models using far fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion, according to FactSet. The company's net income is expected to reach $19.58 billion. What happens with Nvidia matters for the entire U.S. stock market. The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. The tech giant, based in Santa Clara, California, is now worth over $3 trillion. Nvidia and other companies benefiting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week. Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the U.S. economy from tariffs and other policies of President Donald Trump. Nvidia alone accounted for more than a fifth of all of the S&P 500 index's total return last year. None of the other 499 companies in the index came close. If Nvidia can't keep up its momentum, particularly when critics say its stock price has climbed too much and too quickly, Americans holding S&P 500 index funds in their 401(k) and other investing accounts could be set for pain. The fourth-quarter earnings will be the company's first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other U.S. rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data. The frenzy over DeepSeek caused $595 billion in Nvidia's wealth to briefly vanish. But the company in a statement commended DeepSeek's work as "an excellent AI advancement" that leveraged "widely-available models and compute that is fully export control compliant." Nvidia had carved out an early lead in the AI applications race, partly because of founder and CEO Jensen Huang's successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia's invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday. -- -- Associated Press writer Stan Choe contributed to this report.

Why Nvidia's earnings are important to the entire U.S. stock market

LOS ANGELES (AP) -- Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results Wednesday, with analysts eyeing future demand amid a Chinese upstart's claim that it can train competitive AI models using far fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion, according to FactSet. The company's net income is expected to reach $19.58 billion. What happens with Nvidia matters for the entire U.S. stock market. The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. The tech giant, based in Santa Clara, California, is now worth over $3 trillion. Nvidia and other companies benefiting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week. Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the U.S. economy from tariffs and other policies of President Donald Trump. Nvidia alone accounted for more than a fifth of all of the S&P 500 index's total return last year. None of the other 499 companies in the index came close. If Nvidia can't keep up its momentum, particularly when critics say its stock price has climbed too much and too quickly, Americans holding S&P 500 index funds in their 401(k) and other investing accounts could be set for pain. The fourth-quarter earnings will be the company's first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other U.S. rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data. The frenzy over DeepSeek caused $595 billion in Nvidia's wealth to briefly vanish. But the company in a statement commended DeepSeek's work as "an excellent AI advancement" that leveraged "widely-available models and compute that is fully export control compliant." Nvidia had carved out an early lead in the AI applications race, partly because of founder and CEO Jensen Huang's successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia's invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday. -- -- Associated Press writer Stan Choe contributed to this report.

Dow Jones Today: Stock Futures Higher Ahead of Nvidia Earnings Report as Market Looks to Snap Four-Day Slump

Stephen Wisnefski is the Executive Editor of News at Investopedia. He has more than two decades of experience as a journalist and newsroom leader, including 25 years at Dow Jones and The Wall Street Journal. Futures are pointing to a higher open for major U.S. stock indexes on Wednesday as investors await the highly anticipated earnings report from AI chipmaker Nvidia. Futures tied to the Dow Jones Industrial Average were up 0.3% about 45 minutes before the opening bell, while those linked to the S&P 500 and tech-heavy Nasdaq added 0.6% and 0.8%, respectively. The S&P 500 and Nasdaq are riding a four-session streak of heavy losses, while the Dow has finished slightly higher the past two days after posting its biggest weekly losses since October last week. The major indexes were trading near record highs a week ago, but they've stumbled lately amid investor concerns about the economic outlook and uncertainty about the potential impact of policies coming out of the Trump White House. Shares of Nvidia (NVDA), which is scheduled to release its results after the closing bell, were up nearly 3% in premarket trading. The earnings report from Nvidia, which has become a marquee quarterly event for market participants, could help revive optimism about the AI trade that has fueled a stock market rally in recent years or inject fresh concerns about the sustainability of those gains. Other large-cap technology stocks were mostly higher this morning. Chipmaker Broadcom (AVGO) was up 2.5% and EV maker Tesla (TSLA) gained 1.5%, rebounding from a steep drop on Tuesday. Microsoft (MSFT), Alphabet (GOOG), Meta Platforms (META) and Amazon (AMZN) were also rising, while Apple (AAPL) fell slightly. Shares of Super Micro Computer (SMCI) soared 20% after the server maker submitted its delayed financial reports just ahead of a deadline late Tuesday to avoid being delisted by the Nasdaq. Workday (WDAY) shares surged more than 10% ahead of the bell following a better-than-expected earnings reporter from the provider of human resources software. Shares of home improvement retailer Lowe's (LOW) were up nearly 4% after its quarterly results topped analysts' expectations. Bitcoin was down slightly at around $87,800 this morning after plunging to a three-month low on Tuesday. Gold futures were up slightly at $2,925 an ounce, while West Texas Intermediate crude oil futures were holding steady at around $68.90 per barrel. The yield on 10-year Treasurys, which has fallen in recent days amid the rising concerns about the health of the U.S. economy, was little-changed at 4.30% in recent trading. Market participants are keeping a close eye on economic data, with a particular focus on inflation numbers due on Friday.

Why Nvidia's earnings are important to the entire U.S. stock market

LOS ANGELES -- Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results Wednesday, with analysts eyeing future demand amid a Chinese upstart's claim that it can train competitive AI models using far fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion, according to FactSet. The company's net income is expected to reach $19.58 billion. What happens with Nvidia matters for the entire U.S. stock market. The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. The tech giant, based in Santa Clara, California, is now worth over $3 trillion. Nvidia and other companies benefiting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week. Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the U.S. economy from tariffs and other policies of President Donald Trump. Nvidia alone accounted for more than a fifth of all of the S&P 500 index's total return last year. None of the other 499 companies in the index came close. If Nvidia can't keep up its momentum, particularly when critics say its stock price has climbed too much and too quickly, Americans holding S&P 500 index funds in their 401(k) and other investing accounts could be set for pain. The fourth-quarter earnings will be the company's first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other U.S. rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data. The frenzy over DeepSeek caused $595 billion in Nvidia's wealth to briefly vanish. But the company in a statement commended DeepSeek's work as "an excellent AI advancement" that leveraged "widely-available models and compute that is fully export control compliant." Nvidia had carved out an early lead in the AI applications race, partly because of founder and CEO Jensen Huang's successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia's invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday. -- -- Associated Press writer Stan Choe contributed to this report.

Nvidia's Shaken Aura of Invincibility Is Set for Earnings Test

(Bloomberg) -- Nvidia Corp.'s earnings are set to dictate whether artificial intelligence can regain its status as the key driver behind Wall Street gains -- or trigger more weakness after the Magnificent Seven group of technology stocks fell into correction territory. Reports from the leader in AI chips have become some of the most important events of the year for Wall Street. Nvidia's fourth-quarter earnings due after Wednesday's close may be its most critical yet, coming after the emergence of China-based startup DeepSeek scrambled the outlook for AI infrastructure needs. While Nvidia shares had been trending higher this month, they remain below their pre-DeepSeek levels. Investors have been more reluctant to buy this dip than previous selloffs, and hedge funds have sold tech of late. It's also the first time since 2022 that Nvidia will report earnings with shares down since its last report. "DeepSeek opened our eyes to the fact that Nvidia is not invincible," said Shana Sissel, chief investment officer at Banrion Capital Management, who expects muted results from the chipmaker this quarter. Options data show the implied move around the report is about 8.5% in either direction. "The other tech companies that have reported have been broadly pessimistic and the AI parts of the business were in some cases the most negative parts," she added. "I'm feeling pretty cautious, and am not overly optimistic that this will be the kind of report we've seen a lot from Nvidia over the past year and a half. That could lead to a massive selloff." DeepSeek's emergence in January blew a hole in what had been one of Wall Street's sturdiest trades: that developing AI would require massive investments in computing power and related infrastructure, notably the kind of chips Nvidia specializes in. The China-based firm claimed performance that is comparable to US models despite requiring far fewer chips and less computing power. The latest hiccup for tech stocks came after TD Cowen wrote that Microsoft Corp. has begun canceling leases for a substantial amount of datacenter capacity in the US, a move that may reflect concerns about whether it's building more AI computing than it will need over the long term. Still, a key theme of megacap tech reports this earnings season -- including from Nvidia customers Microsoft, Amazon.com Inc., Alphabet Inc., and Meta Platforms Inc. -- is that they all affirmed or notably boosted their capex plans, suggesting they're not primed to turn off the spigot to Nvidia products. "This quarter we've seen increases to capex numbers that were already dramatic, and what gives me encouragement is that the companies providing the majority of the spend and AI infrastructure are the strongest companies in history, which speaks to the sustainability of this trend," said Nick Rubinstein, technology equity portfolio manager at Jennison Associates. According to data compiled by Bloomberg, the analyst consensus for Nvidia's net 2026 earnings has stayed steady over the past quarter, while the view for revenue is up about 2%, a sign Wall Street firms aren't trimming their estimates on account of DeepSeek or anything else. In Wednesday's release, analysts expect Nvidia to report more than $38 billion in quarterly revenue, a 73% increase from the same period a year earlier. The steadiness with estimates, coupled with a stock that is down since its last report, has diminished what had been one of the biggest sticking points about Nvidia: its valuation. Shares currently trade at 28 times estimated earnings, below their 10-year average, and not far from the Nasdaq 100 Index, which carries a multiple near 26. "What's important to recognize is that this is no longer an expensive stock," said Jennison's Rubinstein. "Considering the growth is north of 20%, I think the multiple is relatively fair." Wall Street remains widely positive on Nvidia, as nearly 90% of the analysts tracked by Bloomberg recommend buying, while just one firm -- Punto Research -- has a sell rating. The average analyst price target points to upside of 38% over the coming 12 months, among the highest implied returns among components of the Philadelphia Stock Exchange Semiconductor Index. "It's really not hard to back into an upside case for Nvidia," said Matt Stucky of Northwestern Mutual Wealth Management, who is optimistic about the growth potential of the company's Blackwell chip, among other factors. If investors' concerns "were to dissipate, that's where you start to see some multiple expansion." Tech Chart of the Day Seven of the biggest companies that have powered the majority of the S&P 500 Index's gains over the past two years are having a difficult start to 2025. The Bloomberg Magnificent 7 index, an equal-weighted gauge that consists of Apple Inc., Nvidia Corp., Microsoft Corp., Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Tesla Inc., has fallen more than 10% from a December high, passing the threshold that meets the definition of a technical correction.

Stock futures rise after S&P 500 posts fourth losing day, Nvidia earnings loom: Live updates

Stock futures rose on Tuesday evening as investors contend with a fourth-straight day of losses for the S&P 500 and await earnings from artificial intelligence darling Nvidia. A weaker-than-expected consumer confidence reading from the Conference Board weighed on stocks Tuesday. A raft of recent reports, including disappointing retail sales numbers and a weak consumer sentiment reading have spurred traders' worries around the economy over the past week. Nvidia's fourth-quarter earnings, due after the closing bell Wednesday, could be the next catalyst for the market. The report arrives at a pivotal time for Nvidia: The emergence of DeepSeek raised questions about the sustainability of the once-hot AI trade. The chip giant and other momentum plays are also showing signs of fizzling, with Nvidia down more than 5% in 2025. "I think as the earnings report comes out tomorrow, my expectation is it's going to be a lot like September," NYU Stern School of Business finance professor Aswath Damodaran said Tuesday on CNBC's "Closing Bell." "A replay of [the] September [quarter] where they will beat analyst expectations, but the market is going to be disappointed because the market seems to have set expectations higher than what analysts are seeing for the company," he added. Other earnings reports out Wednesday include Lowe's, TJX and Salesforce. Economic data due on Wednesday include new home sales and building permits. The main event for investors will be the release of the personal consumption expenditures price index on Friday. The PCE is the Federal Reserve's preferred inflation gauge.

Why Nvidia's earnings are important to the entire U.S. stock market

Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results Wednesday, with analysts eyeing future demand amid a Chinese upstart's claim that it can train competitive AI models using far fewer resources.Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results Wednesday, with analysts eyeing future demand amid a Chinese upstart's claim that it can train competitive AI models using far fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion, according to FactSet. The company's net income is expected to reach $19.58 billion. What happens with Nvidia matters for the entire U.S. stock market. The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. The tech giant, based in Santa Clara, California, is now worth over $3 trillion. Nvidia and other companies benefiting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week. Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the U.S. economy from tariffs and other policies of President Donald Trump. Nvidia alone accounted for more than a fifth of all of the S&P 500 index's total return last year. None of the other 499 companies in the index came close. If Nvidia can't keep up its momentum, particularly when critics say its stock price has climbed too much and too quickly, Americans holding S&P 500 index funds in their 401(k) and other investing accounts could be set for pain. The fourth-quarter earnings will be the company's first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other U.S. rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data. The frenzy over DeepSeek caused $595 billion in Nvidia's wealth to briefly vanish. But the company in a statement commended DeepSeek's work as "an excellent AI advancement" that leveraged "widely-available models and compute that is fully export control compliant." Nvidia had carved out an early lead in the AI applications race, partly because of founder and CEO Jensen Huang's successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia's invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday.

Wall Street is anxiously watching Nvidia earnings again. What to know, by the numbers

Wall Street is once again fixated on Nvidia, as the main player in the artificial intelligence mania is set to report earnings after the bell Wednesday and give an update on demand for its semiconductors, which are used to power AI applications. This will be Nvidia's first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips. Nvidia's market value saw a one-day drop of nearly $600 billion after the news came out. Here's a look at Nvidia, by the numbers. Nvidia's total market value as of the close Tuesday, second in the S&P 500 behind Apple ($3.711 trillion). Microsoft is third with a market value just below $3 trillion ($2.958 trillion). Two years ago, Nvidia's market value was below $600 billion. The one-day drop in Nvidia shares on Jan. 27 after the DeepSeek's revelation called into question all the spending Wall Street had assumed would go into not only Nvidia's chips but also the ecosystem that's built around the AI boom. The stock rose more than 170% in 2024. That's approximately how much of the S&P 500's gain for last year could be attributed to Nvidia alone, according to S&P Dow Jones Indices. By comparison, Amazon accounted for about 6% of the gain. Nvidia replaced Intel in the Dow Jones Industrial Average in November. Wall Street's estimate for overall revenue in the fourth quarter. That would be up more than 70% from last year's fourth quarter. Analysts' estimate for Nvidia's revenue for the fiscal year that ended in January 2025, which the company will report later Wednesday. That would be more than double its revenue for fiscal 2024 and more than four times its receipts the year before that. That's how many dozen eggs one could buy with Nvidia's market value of $3.101 trillion, using the average price of $4.95 per dozen for January from the Federal Reserve.

Wall Street Is Anxiously Watching Nvidia Earnings Again. What to Know, by the Numbers

Wall Street is once again fixated on Nvidia, as the main player in the artificial intelligence mania is set to report earnings after the bell Wednesday and give an update on demand for its semiconductors, which are used to power AI applications. This will be Nvidia's first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips. Nvidia's market value saw a one-day drop of nearly $600 billion after the news came out. Nvidia's total market value as of the close Tuesday, second in the S&P 500 behind Apple ($3.711 trillion). Microsoft is third with a market value just below $3 trillion ($2.958 trillion). Two years ago, Nvidia's market value was below $600 billion. -17% The one-day drop in Nvidia shares on Jan. 27 after the DeepSeek's revelation called into question all the spending Wall Street had assumed would go into not only Nvidia's chips but also the ecosystem that's built around the AI boom. The stock rose more than 170% in 2024. 22% That's approximately how much of the S&P 500's gain for last year could be attributed to Nvidia alone, according to S&P Dow Jones Indices. By comparison, Amazon accounted for about 6% of the gain. Nvidia replaced Intel in the Dow Jones Industrial Average in November. $38.1 billion Wall Street's estimate for overall revenue in the fourth quarter. That would be up more than 70% from last year's fourth quarter. $129.4 billion Analysts' estimate for Nvidia's revenue for the fiscal year that ended in January 2025, which the company will report later Wednesday. That would be more than double its revenue for fiscal 2024 and more than four times its receipts the year before that. 626.5 billion That's how many dozen eggs one could buy with Nvidia's market value of $3.101 trillion, using the average price of $4.95 per dozen for January from the Federal Reserve. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Why Nvidia's earnings are important to the entire US stock market

The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. Sales of Nvidia's artificial intelligence chip Blackwell will be top of mind when the company releases its latest financial results late on Wednesday, with analysts eyeing future demand amid Chinese firm's DeepSeek's claim that it can train competitive AI models using far fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion (€36.4bn), according to FactSet. The company's net income is expected to reach $19.58bn (€18.7bn). What happens with Nvidia matters for the entire US stock market. The chip company has grown into the second-largest company on Wall Street, which means the stock's movement carries more weight on the S&P 500 and other indexes than every company except Apple. The tech giant, based in Santa Clara, California, is now worth more than $3tn (€2.9tn). Nvidia and other companies benefitting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week. Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the US economy from tariffs and other policies of President Donald Trump. DeepSeek snapping at US firms' heels Nvidia alone accounted for more than a fifth of all of the S&P 500 index's total return last year. None of the other 499 companies in the index came close. If Nvidia can't keep up its momentum, particularly when critics say its stock price has climbed too much and too quickly, Americans holding S&P 500 index funds in their 401(k) and other investing accounts could be set for pain. The fourth-quarter earnings will be the company's first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other US rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data. The frenzy over DeepSeek caused $595bn (€568.50bn) in Nvidia's wealth to briefly vanish. But the company in a statement commended DeepSeek's work as "an excellent AI advancement" that leveraged "widely-available models and compute that is fully export control compliant". Nvidia had carved out an early lead in the AI applications race, partly because of founder and CEO Jensen Huang's successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia's invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics. Nvidia will release its quarterly earnings after the market closes Wednesday.

Crucial Nvidia results to set the course for faltering 'Magnificent Seven'

Feb 26 (Reuters) - Nvidia's much-awaited results - seen as a barometer of AI chip demand - on Wednesday could prove to be an inflection point for artificial intelligence stocks as technology companies tighten data center spending. Investors have raked in big returns over the last few years from the AI boom that has accrued largely to the so-called "Magnificent Seven", a group of tech giants that includes Nvidia, Microsoft and automaker Tesla. That rally marched on despite growing wariness of the stocks' high valuations - and whether the billions of dollars in investment would yield significant returns. Those concerns have come to the fore over the last month as several of the stocks declined, led by a 25% drop in Tesla, while the S&P 500 outperformed the group this year. The stocks have been further shaken this week after an analyst report said Microsoft scrapped some data center leases. Shares of Nvidia (NVDA.O), opens new tab have declined nearly 6% in that time, fed by worries over the low cost of China's DeepSeek. "Nvidia has the heavy task of lifting the market mood this week. If it cannot, the selloff in stocks could accelerate," said Ipek Ozkardeskaya, market analyst at Swissquote Bank. "Hopes rest on Nvidia's shoulders." The stock rose 2.6% in premarket trading on Wednesday, lifting the chip sector as well as stock index futures from a selloff due to a dour consumer confidence report. Nvidia, the world's second most valuable company, has been the top beneficiary of Wall Street's picks-and-shovels AI trade, adding about $2.7 trillion in market value since ChatGPT's November 2022 debut -- hailed as AI's "iPhone moment". The company's near 1,800% surge makes it the leader of the Mag Seven. Over the last five years those stocks, on average, have more than tripled, while the benchmark S&P 500 has gained about 65%. So far in 2025, those stocks have stumbled a bit. The Mag 7 is down about 4.5%, while the rest of the S&P 500 has gained about 4.4% - so the entire index has eked out a mere 1% rise. Options imply a 7.7% swing for shares of the AI bellwether in either direction after the results, in line with the stock's average move of 7.6% on the day after results over the last 12 quarters, according to analytics service ORATS. Despite its blistering rally, Nvidia stock is trading at a lower premium as earnings estimates have climbed faster than its share price. The stock trades at about 28 times expected earnings, down from 36 a year ago and a peak above 80 in June 2023, LSEG data showed. Still, a recent stumble in January after DeepSeek unveiled lower-cost AI models wiped $593 billion from Nvidia's market cap - a record one-day market value loss that underscored the risks of the AI trade. "DeepSeek rattled investors but, given Nvidia's first mover advantage and the huge infrastructure investment plans from tech giants like Meta, it's an indication that Nvidia's high-end chips will remain in demand," said Susannah Streeter, head of money and markets, Hargreaves Lansdown. Reporting by Aditya Soni in Bengaluru; Editing by Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Technology

Wall Street is anxiously watching Nvidia earnings again. What to know, by the numbers

Wall Street is once again fixated on Nvidia, as the main player in the artificial intelligence mania is set to report earnings after the bell Wednesday and give an update on demand for its semiconductors, which are used to power AI applications. This will be Nvidia's first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips. Nvidia's market value saw a one-day drop of nearly $600 billion after the news came out. Here's a look at Nvidia, by the numbers. Nvidia's total market value as of the close Tuesday, second in the S&P 500 behind Apple ($3.711 trillion). Microsoft is third with a market value just below $3 trillion ($2.958 trillion). Two years ago, Nvidia's market value was below $600 billion. The one-day drop in Nvidia shares on Jan. 27 after the DeepSeek's revelation called into question all the spending Wall Street had assumed would go into not only Nvidia's chips but also the ecosystem that's built around the AI boom. The stock rose more than 170% in 2024. That's approximately how much of the S&P 500's gain for last year could be attributed to Nvidia alone, according to S&P Dow Jones Indices. By comparison, Amazon accounted for about 6% of the gain. Nvidia replaced Intel in the Dow Jones Industrial Average in November. Wall Street's estimate for overall revenue in the fourth quarter. That would be up more than 70% from last year's fourth quarter. Analysts' estimate for Nvidia's revenue for the fiscal year that ended in January 2025, which the company will report later Wednesday. That would be more than double its revenue for fiscal 2024 and more than four times its receipts the year before that. That's how many dozen eggs one could buy with Nvidia's market value of $3.101 trillion, using the average price of $4.95 per dozen for January from the Federal Reserve.

Wall Street is anxiously watching Nvidia earnings again. What to know, by the numbers

Wall Street is once again fixated on Nvidia, as the main player in the artificial intelligence mania is set to report earnings after the bell Wednesday and give an update on demand for its semiconductors, which are used to power AI applications. This will be Nvidia's first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips. Nvidia's market value saw a one-day drop of nearly $600 billion after the news came out. Nvidia's total market value as of the close Tuesday, second in the S&P 500 behind Apple ($3.711 trillion). Microsoft is third with a market value just below $3 trillion ($2.958 trillion). Two years ago, Nvidia's market value was below $600 billion. -17% The one-day drop in Nvidia shares on Jan. 27 after the DeepSeek's revelation called into question all the spending Wall Street had assumed would go into not only Nvidia's chips but also the ecosystem that's built around the AI boom. The stock rose more than 170% in 2024. 22% That's approximately how much of the S&P 500's gain for last year could be attributed to Nvidia alone, according to S&P Dow Jones Indices. By comparison, Amazon accounted for about 6% of the gain. Nvidia replaced Intel in the Dow Jones Industrial Average in November. $38.1 billion Wall Street's estimate for overall revenue in the fourth quarter. That would be up more than 70% from last year's fourth quarter. $129.4 billion Analysts' estimate for Nvidia's revenue for the fiscal year that ended in January 2025, which the company will report later Wednesday. That would be more than double its revenue for fiscal 2024 and more than four times its receipts the year before that. 626.5 billion That's how many dozen eggs one could buy with Nvidia's market value of $3.101 trillion, using the average price of $4.95 per dozen for January from the Federal Reserve.

Everyone On Wall Street Is Watching for Nvidia's Earnings. Here's Why

Artificial intelligence stocks have been on shaky ground ahead of Nvidia's report: Favorites like Palantir, Vistra, and Applovin have all fallen at least 20% in the last week. Nvidia (NVDA), the poster child of Wall Street's AI craze, is set to report quarterly earnings amid rising investor uncertainty about the U.S. economy, politics, and the economics of AI. The earnings report, due after markets close Wednesday, could be a wrecking ball slamming into an antsy stock market. Or it could be the fuel needed to revive a sputtering AI rally: Nvidia has been the prime beneficiary of the AI buildout of the last two years and any deceleration or acceleration in investment should show up in its results. All of Wall Street will be scrutinizing sales of the chipmaker's Blackwell platform. Nvidia executives repeatedly have said demand for Blackwell has outstripped supply. Nvidia is expected to report that quarterly sales grew more than 70% to $38 billion and net income jumped more than 60% to $21 billion, according to estimates compiled by Visible Alpha. This is the company's first earnings report since Chinese startup DeepSeek shook AI stocks with an open-source model it claimed matched the performance of advanced US models at a fraction of the cost. The ensuing sell-off wiped a record $589 billion off Nvidia's market value as investors worried that tech companies may slow their spending on Nvidia chips to instead focus on cost efficiency. However, DeepSeek's impact -- if there is any -- is unlikely to appear in Nvidia's next set of backward-looking numbers, which will cover the three months ended Jan. 26, the day before the DeepSeek sell-off. With a market capitalization of more than $3 trillion, Nvidia has more influence on the S&P 500 than any stock but Apple (AAPL). Still, Nvidia stock dipped nearly 7% across the three sessions after its November earnings report even as the S&P 500 ticked higher on each of those days. And last August, Nvidia shares plunged more than 6% the day after the company's results, but most big tech stocks rose and the S&P 500 finished flat. High expectations heading into Nvidia's earnings have led to disappointment on Wall Street. Even if Nvidia beats investors expectations on Wednesday, it may not be enough to make the stock pop. Ultimately, the AI trade's recent fragility could be what makes this report particularly consequential for the broader stock market. Concerns about tariffs, stubborn inflation, and elevated interest rates have weighed on stocks generally in the past week, but highflying stocks linked to AI have been hit particularly hard. Palantir Technologies (PLTR) stock, which slumped last week amid reports of possible military budget cuts, has lost about 30% of its value in the last five sessions. Nuclear power provider Vistra (VST) and AI marketing software firm Applovin (APP) have shed some 20% and 24%, respectively, in the same period. All three stocks had at least tripled in value in the 12 months before their recent pullback. And there's plenty of uncertainty on the horizon. Investors may be wondering if DeepSeek will change domestic demand for Nvidia's chips or prompt the Trump administration to further restrict what technology can be sold to China, concerns that could cast a shadow over generally upbeat results.

Nvidia earnings ahead, House votes on Trump's tax cut plan - what's moving markets By Investing.com

Investing.com - U.S. stock futures pointed up on Wednesday ahead of all-important results from Nvidia (NASDAQ:NVDA). Investors will likely be keeping an eye out for any comments from the semiconductor behemoth on the recent emergence of a cut-price open-source AI model from China's DeepSeek. Meanwhile, the U.S. House of Representatives votes on a massive tax-cut bill and Bitcoin hovers below $90,000. 1. Futures inch higher U.S. stock futures ticked higher on Wednesday as investors geared up for quarterly earnings from artificial intelligence-darling Nvidia (more below). By 03:35 ET (08:35 GMT), the Dow futures contract had edged up by 84 points or 0.2%, S&P 500 futures had gained 23 points or 0.4%, and Nasdaq 100 futures had increased by 129 points or 0.6%. The benchmark S&P 500 and tech-heavy Nasdaq Composite both slipped in the previous session, while the 30-stock Dow Jones Industrial Average inched up. Traders were assessing fresh economic data which showed a deterioration in U.S. consumer confidence and suggested that households were fretting over the potential impact on inflation of President Donald Trump's import tariff plans. In individual stocks, Eli Lilly (NYSE:LLY) shares gained after the pharmaceutical giant announced higher doses of vials of its popular Zepbound obesity drug at a lower price than its injector-pen versions. Home Depot (NYSE:HD) shares also rose after the home improvement chain's solid fourth-quarter returns helped offset an underwhelming annual comparable sales forecast. Meanwhile, Zoom Communications (NASDAQ:ZM) dropped on a disappointing full-year revenue outlook. Crypto-exposed stocks fell as well, reflecting a slump in the price of Bitcoin. 2. Nvidia earnings loom large Highlighting the agenda on Wednesday will be fourth-quarter results from Nvidia, the semiconductor titan that has often been viewed as a figurehead of a surge in enthusiasm around the capabilities of AI. Nvidia, which designs chips that are considered to be integral parts of AI applications, is due to report after U.S. stock markets close. Executives will likely face questions from analysts about the implications of the recent emergence of a low-cost AI model from Chinese start-up DeepSeek, which raised major questions over the sustainability and eventual returns from heavy AI investments by mega-cap U.S. technology companies. The market ructions caused by DeepSeek hit Nvidia particularly hard, with the stock shedding $593 billion in value in a single session in late January -- the worst one-day loss in Wall Street history. Nvidia is tipped to post overall fourth-quarter revenue of $38.25 billion, including $34.06 billion in sales at its crucial data center business, according to Bloomberg consensus estimates. For the first quarter, the company is expected to guide for a top-line total of $42.26 billion. 3. U.S. House votes on Trump-backed tax-cut package The U.S. House of Representatives has voted to approve a $4.5 trillion package of tax cuts and border security measures, advancing a bill that includes many of President Trump's biggest 2025 priorities. In a narrow 217-215 vote, the Republican-controlled lower chamber of the U.S. Congress backed sending the budget resolution to the Senate. All but one Republican voted in favor of the bill, while no member of the opposition Democrats supported it. Republicans in the Senate are now anticipated to take up the bill, which is seen as a preliminary step to extending Trump's 2017 tax cuts later this year. The plan would also provide funding to deporting illegal migrants and bolster border security. Crucially, if both the House and the Senate pass the same budget framework, Republicans would be allowed to exercise a parliamentary tool needed to get around Democratic opposition. In a note to clients, analysts at Vital Knowledge argued that the S&P 500 would "continue with its sideways price action" until there is more clarity around the budget resolution. 4. Bitcoin hovers around three-month low Bitcoin fell on Wednesday, hovering near a three-month low, as worries over U.S. trade tariffs and slowing economic growth sparked a wave of risk-averse moves across cryptocurrencies. The world's largest cryptocurrency extended losses into a fourth straight session, having wiped out roughly $8,000 from its price over the past week. Bitcoin's decline has partly stemmed from a recent $1.5 billion hack of popular exchange ByBit. Soft economic data and tariff jitters have also weighed on the digital asset, which is often described as a proxy for risk appetite. Meanwhile, the token took little support from Strategy -- the world's biggest corporate holder of Bitcoin -- announcing a purchase of $2 billion more coins. 5. Gold muted Gold prices moved slightly lower in European trade on Wednesday after pulling back from recent record highs, although safe-haven demand remained high in the face of uncertainty over U.S. tariffs and growth. Copper prices, on the other hand, rose sharply as a major power outage in Chile -- the world's top copper producer -- threatened to disrupt supplies. This largely overshadowed suggestions from Trump that he may impose tariffs on imports of the red metal. Elsewhere, oil prices were subdued after they touched two-month lows in the prior session. Traders were looking out for official U.S. stockpile data later on Wednesday.

By the Numbers: Nvidia Posts Another Strong Earnings Report

Wall Street once again fixated on an earnings report from Nvidia, the main player in the artificial intelligence mania. The chipmaker reported earnings after the bell Wednesday that topped analyst forecasts, and shares added 2% in after-hours trading, perhaps indicating that Wall Street quietly hoped for even better results. This is Nvidia's first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips. Nvidia's market value saw a one-day drop of nearly $600 billion after the news came out. Here's a look at Nvidia, by the numbers. Nvidia's total market value as of the close Wednesday, before the release of its earnings report. That's second in the S&P 500 behind Apple ($3.611 trillion). Microsoft is third with a market value just below $3 trillion ($2.972 trillion). Two years ago, Nvidia's market value was below $600 billion. The one-day drop in Nvidia shares on Jan. 27 after DeepSeek's revelation called into question all the spending Wall Street had assumed would go into not only Nvidia's chips but also the ecosystem that's built around the AI boom. The stock rose more than 170% in 2024. Nvidia's revenue for the fourth quarter, easily topping Wall Street's estimate and up 78% from last year's fourth quarter. Nvidia's revenue for the fiscal year that ended in January 2025. That was more than double its revenue for fiscal 2024 and more than four times its receipts the year before that. That's approximately how much of the S&P 500's gain for last year could be attributed to Nvidia alone, according to S&P Dow Jones Indices. By comparison, Amazon accounted for about 6% of the gain. Nvidia replaced Intel in the Dow Jones Industrial Average in November. That's how many dozen eggs one could buy with Nvidia's market value of $3.215 trillion, using the average price of $4.95 per dozen for January from the Federal Reserve. Egg prices have spiked due to an outbreak of bird flu, and supplies of eggs have run short in some areas.

Crucial Nvidia results to set the course for faltering 'Magnificent Seven'

(Reuters) - Nvidia's much-awaited results - seen as a barometer of AI chip demand - on Wednesday could prove to be an inflection point for artificial intelligence stocks as technology companies tighten data center spending. Investors have raked in big returns over the last few years from the AI boom that has accrued largely to the so-called "Magnificent Seven", a group of tech giants that includes Nvidia, Microsoft and automaker Tesla. That rally marched on despite growing wariness of the stocks' high valuations - and whether the billions of dollars in investment would yield significant returns. Those concerns have come to the fore over the last month as several of the stocks declined, led by a 25% drop in Tesla, while the S&P 500 outperformed the group this year. The stocks have been further shaken this week after an analyst report said Microsoft scrapped some data center leases. Shares of Nvidia have declined nearly 6% in that time, fed by worries over the low cost of China's DeepSeek. "Nvidia has the heavy task of lifting the market mood this week. If it cannot, the selloff in stocks could accelerate," said Ipek Ozkardeskaya, market analyst at Swissquote Bank. "Hopes rest on Nvidia's shoulders." The stock rose 2.6% in premarket trading on Wednesday, lifting the chip sector as well as stock index futures from a selloff due to a dour consumer confidence report. Nvidia, the world's second most valuable company, has been the top beneficiary of Wall Street's picks-and-shovels AI trade, adding about $2.7 trillion in market value since ChatGPT's November 2022 debut -- hailed as AI's "iPhone moment". The company's near 1,800% surge makes it the leader of the Mag Seven. Over the last five years those stocks, on average, have more than tripled, while the benchmark S&P 500 has gained about 65%. So far in 2025, those stocks have stumbled a bit. The Mag 7 is down about 4.5%, while the rest of the S&P 500 has gained about 4.4% - so the entire index has eked out a mere 1% rise. Options imply a 7.7% swing for shares of the AI bellwether in either direction after the results, in line with the stock's average move of 7.6% on the day after results over the last 12 quarters, according to analytics service ORATS. Despite its blistering rally, Nvidia stock is trading at a lower premium as earnings estimates have climbed faster than its share price. The stock trades at about 28 times expected earnings, down from 36 a year ago and a peak above 80 in June 2023, LSEG data showed. Still, a recent stumble in January after DeepSeek unveiled lower-cost AI models wiped $593 billion from Nvidia's market cap - a record one-day market value loss that underscored the risks of the AI trade. "DeepSeek rattled investors but, given Nvidia's first mover advantage and the huge infrastructure investment plans from tech giants like Meta, it's an indication that Nvidia's high-end chips will remain in demand," said Susannah Streeter, head of money and markets, Hargreaves Lansdown. (Reporting by Aditya Soni in Bengaluru; Editing by Arun Koyyur)

Amid an Uncertain Year, Can Nvidia Soothe Wall Street's Nerves?

Nvidia must meet its "normal exceed" of Wall Street expectations to keep its stock price elevated, said an analyst. Nvidia (NVDA) has had a bumpy start of 2025. Share price of the A.I. chip giant surged to record highs at the beginning of the year and then fell sharply in late January after the Chinese startup DeepSeek shook Silicon Valley. Now, analysts are eagerly anticipating Nvidia's fourth-quarter and 2024 financial results, set to release tomorrow (Feb. 26), to gauge its actual position in the A.I. race. Nvidia is the world's second most valuable public company with a market cap of more than $3.1 trillion, meaning its earnings report could also have major implications for the broader stock market. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Wall Street expects Nvidia's quarterly revenue to soar 72 percent to $38 billion and profit to jump 64 percent to $19.6 billion. But to keep its share price on an upward trajectory, the company might have to do even better. To avoid a sell-off, Nvidia must meet its "normal exceed," Ted Mortonson, managing director at Baird, told Fortune. While DeepSeek's cost-efficient breakthrough initially led investors to believe demand for A.I. chips could fall, some analysts have pushed back on such fears. "We believe that A.I. GPU demand still exceeds supply, so while slimmer models may enable greater development for the same number of chips, we still think tech firms will continue to buy all the GPUs they can as part of this A.I. 'gold rush,'" said Brian Colello, a Morningstar analyst, in a January note. Nvidia CEO Jensen Huang praised DeepSeek in a recent interview for "making everybody take notice" of opportunities for more efficient A.I. models. While the initial market response suggested Wall Street was losing faith in compute investments, Huang claimed "it's exactly the opposite," given the "fairly compute-intensive" nature of reasoning-focused models like DeepSeek's R1. But Nvidia stock took another hit on Feb. 21, falling 4 percent after the investment bank TD Cowen reported that Microsoft has cancelled leases for at least two data center operators. The news sparked concerns over a decline in demand for A.I. compute. "It points to a potential oversupply position," said TD Cowen analysts in the report. In response, Microsoft noted that it is "well positioned" to meet increasing demand but may "strategically pace or adjust" its infrastructure in some areas. Is Nvidia back on track? Nvidia's earnings come amid a broader market downturn. Last week, major indexes saw their worst day this year so far in response to weaker-than-expected economic reports on the U.S. services sector and consumer sentiment. But when it comes to A.I., tech bulls are confident that Nvidia's quarterly earnings will put an end to Wall Street's caution. While the market is "heavily skewed negative right now around tech sentiment," Nvidia's upcoming performance should "calm the nerves of investors," said Dan Ives of Wedbush Securities in a client note. Updates on Nvidia's new Blackwell chip and demand from Big Tech clients will continue to fuel optimism towards the technology, Ives added. Companies like Microsoft, Meta, Alphabet and Amazon are expected to spend more than $300 billion cumulatively this year on A.I. efforts, including buying Nvidia chips. "After speaking with many enterprise A.I. customers, we have not seen one A.I. enterprise slow down or change," said Ives, who added that no clients want to "lose their place in line" for Nvidia's next-gen chips. During Nvidia's last earnings call in November, Huang noted that Blackwell production was "in full steam." The success of Nvidia's transition to its next-gen GPUs will be closely watched when the company reports earnings tomorrow. "All eyes will be on Blackwell commentary," according to Hans Mosemann, an analyst with Rosenblatt who predicts that Huang will reaffirm that demand for shipments remains high throughout 2025. "We see shipments of Blackwell accelerating as we progress through the year, with a stronger [second half]."

Nvidia Earnings Live Coverage: Shares Rise as Investors Await AI Chipmaker's Results

Stephen Wisnefski is the Executive Editor of News at Investopedia. He has more than two decades of experience as a journalist and newsroom leader, including 25 years at Dow Jones and The Wall Street Journal. Welcome to our live coverage of AI chipmaker Nvidia's (NVDA) highly anticipated quarterly results for the fourth quarter of its fiscal 2025. The poster child of Wall Street's AI craze is set to release its earnings report after the closing bell today amid rising investor uncertainty about the U.S. economy, politics, and the economics of AI. The earnings report from Nvidia, which has become a marquee quarterly event for market participants, could help revive optimism about the AI trade that has fueled a stock market rally in recent years or inject fresh concerns about the sustainability of those gains. Nvidia has been the prime beneficiary of the AI buildout of the last two years and any deceleration or acceleration in investment should show up in its results. Stay tuned here for the details from the earnings report, the conference call with executives and the market reaction to what is widely regarded as the most important earnings release of the quarter.

Wall Street Brunch: Nvidia Will Be An AI Litmus Test (undefined:NVDA)

Nvidia guidance will be crucial for tech bulls. (0:25) Fed's favorite inflation gauge looks more benign than CPI. (2:18) Warren Buffett assures investors on cash pile. (3:07) This is test. For the next few sessions, the stock market will be conducting a test of the AI rally. This is only a test. Will Nvidia (NASDAQ:NVDA) give the bulls a much-needed jolt of belief as macro worries gain a stronger grip on action? We'll find out when the chipmaker reports earnings on Wednesday. Analysts expect Nvidia to report EPS of $0.85 on revenue of $38.15 billion. There have been 6 upward analyst revisions to the bottom line going into the report, with 2 downward revisions. The top line has seen 7 upward revision and 2 to the downside. Victor Dergunov, who runs The Financial Prophet Investing Group on Seeking Alpha, says the "top-line number will be especially important here, as the market will look for signs of continued growth, specifically in the lucrative enterprise AI GPU segment." "While Nvidia guided to only $37.5 billion in sales for Q4, Nvidia often sandbags its forecasts, making it easier to provide better-than-anticipated results," so $38-to-$39 billion in sales with a small beat on profit wouldn't be a surprise, he said. Guidance will be crucial in the wake of DeepSeek, but despite high expectations, Nvidia can deliver "another constructive earnings report, which should support its stock price trajectory and the trajectory of other high-quality AI picks." KeyBanc Capital Markets are expecting a strong report that will "solidly beat" forecasts and provide higher, albeit conservative, guidance.DeepSeek's recent announcement concerning its latest AI product has led to a spike in demand for Nvidia's H20 GPUs in China, analysts added. Shares of Nvidia are barely higher year to date, but are up 15% from their low at the beginning of this month. On the economic front, the highlight of the week will be the Fed's favorite inflation gauge, which is expected to show a more benign picture of price pressure than the January CPI. The January core PCE index hits Friday and economists expect a 0.3% rise on the month, cutting the annual rate to 2.6%. Wells Fargo economists say "inflation progress is slower going, but it hasn't necessarily gone into reverse." David Rogal, lead portfolio manager of the BlackRock Total Return Fund says "we think the recent FOMC rate cuts were part of a 'recalibration cycle,' to adjust policy rates down with inflation, so as to not cause a passive tightening in monetary policy." "While the Fed's easing bias remains, we think the central bank has transitioned to more of an extended hold, at a minimum through June, and potentially longer (absent any unforeseen shocks)." In the news this weekend, Berkshire Hathaway (BRK.A) (BRK.B) reported a surge in Q4 operating earnings, delivering a full-year 27% jump to $47.44 billion. The company said Q4 operating earnings increased 71.3% Y/Y to $14.53 billion. Berkshire's cash pile swelled to a record $334.2 billion as of the end of last year, up from $325.21 billion as of September 30, 2024. The cash has long been a focus for investors impatient for it to be put to work. In his annual letter, Warren Buffett assured investors that Berkshire Hathaway's equity holdings would always exceed its cash. "Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities - mostly American equities, although many of these will have international operations of significance," he wrote. "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned." He also explained the company's policy of not paying dividends to shareholders, preferring to reinvest the money into the company. Berkshire only paid a dividend once in the 60 years Buffett has controlled it. On Jan. 3, 1967, the company paid out $0.10 per A share. "For sixty years, Berkshire shareholders endorsed continuous reinvestment and that enabled the company to build its taxable income," Buffett said. And in the Wall Street Research corner (and speaking of Goldman) They are out with their Rising Stars list. Those are the stocks with the largest increase in the number of hedge fund owners from the third quarter to the fourth quarter of 2024. Senior Strategist Ben Snider says stocks with the largest increase in number of hedge fund investors have historically outperformed their sector peers during the quarters that followed their rise in popularity.

Nvidia to report earnings amid infrastructure spending, DeepSeek concerns

Nvidia CEO Jensen Huang delivers a keynote address at the Consumer Electronics Show on Jan. 6.Artur Widak / Anadolu via Getty Images file Nvidia is scheduled to report fourth-quarter financial results on Wednesday after the bell. It's expected to put the finishing touches on one of the most remarkable years from a large company ever. Analysts polled by FactSet expect $38 billion in sales for the quarter ended in January, which would be a 72% increase on an annual basis. The January quarter will cap off the second fiscal year where Nvidia's sales more than doubled. It's a breathtaking streak driven by the fact that Nvidia's data center graphics processing units, or GPUs, are essential hardware for building and deploying artificial intelligence services like OpenAI's ChatGPT. In the past two years, Nvidia stock has risen 478%, making it the most valuable U.S. company at times with a market cap over $3 trillion. But Nvidia's stock has slowed in recent months as investors question where the chip company can go from here. It's trading at the same price as it did last October, and investors are wary of any signs that Nvidia's most important customers might be tightening their belts after years of big capital expenditures. This is particularly concerning in the wake of recent breakthroughs in AI out of China. Much of Nvidia's sales go to a handful of companies building massive server farms, usually to rent out to other companies. These cloud companies are typically called "hyperscalers." Last February, Nvidia said a single customer accounted for 19% of its total revenue in fiscal 2024. Morgan Stanley analysts estimated this month that Microsoft will account for nearly 35% of spending in 2025 on Blackwell, Nvidia's latest AI chip. Google is at 32.2%, Oracle at 7.4% and Amazon at 6.2%. This is why any sign that Microsoft or its rivals might pull back spending plans can shake Nvidia stock. Last week, TD Cowen analysts said that they'd learned that Microsoft had canceled leases with private data center operators, slowed its process of negotiating to enter into new leases and adjusted plans to spend on international data centers in favor of U.S. facilities. The report raised fears about the sustainability of AI infrastructure growth. That could mean less demand for Nvidia's chips. TD Cowen's Michael Elias said his team's finding points to "a potential oversupply position" for Microsoft. Shares of Nvidia fell 4% on Friday. Microsoft pushed back Monday, saying it still planned to spend $80 billion on infrastructure in 2025. "While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions. This allows us to invest and allocate resources to growth areas for our future," a spokesperson told CNBC. Over the last month, most of Nvidia's key customers touted large investments. Alphabet is targeting $75 billion in capital expenditures this year, Meta will spend as much as $65 billion and Amazon is aiming to spend $100 billion. Analysts say about half of AI infrastructure capital expenditures ends up with Nvidia. Many hyperscalers dabble in AMD's GPUs and are developing their own AI chips to lessen their dependence on Nvidia, but the company holds the majority of the market for cutting-edge AI chips. So far, these chips have been used primarily to train new age AI models, a process that can cost hundreds of millions dollars. After the AI is developed by companies like OpenAI, Google and Anthropic, warehouses full of Nvidia GPUs are required to serve those models to customers. That's why Nvidia projects its revenue to continue growing. Another challenge for Nvidia is last month's emergence of Chinese startup DeepSeek, which released an efficient and "distilled" AI model. It had high enough performance that suggested billions of dollars of Nvidia GPUs aren't needed to train and use cutting-edge AI. That temporarily sunk Nvidia's stock, causing the company to lose almost $600 billion in market cap. Nvidia CEO Jensen Huang will have an opportunity on Wednesday to explain why AI will continue to need even more GPU capacity even after last year's massive build-out. Recently, Huang has spoken about the "scaling law," an observation from OpenAI in 2020 that AI models get better the more data and compute are used when creating them. Huang said that DeepSeek's R1 model points to a new wrinkle in the scaling law that Nvidia calls "Test Time Scaling." Huang has contended that the next major path to AI improvement is by applying more GPUs to the process of deploying AI, or inference. That allows chatbots to "reason," or generate a lot of data in the process of thinking through a problem. AI models are trained only a few times to create and fine-tune them. But AI models can be called millions of times per month, so using more compute at inference will require more Nvidia chips deployed to customers. "The market responded to R1 as in, 'oh my gosh, AI is finished,' that AI doesn't need to do any more computing anymore," Huang said in a pretaped interview last week. "It's exactly the opposite."

Nvidia Earnings Could Crash the Stock Market if Wall Street Doesn't Get Its Way

Nvidia's earnings don't just move markets -- they are the market. The latest results, due Wednesday after the closing bell, will represent more than a marginal company update. They'll provide a litmus test of whether the artificial intelligence trade has room to run, and the results will likely determine the mood for the rest of the S&P 500. Nvidia has been investors' favorite stock since ChatGPT debuted in November 2022, and its blistering shareholder returns have propelled the multi-trillion-dollar AI boom. The stock has tumbled nearly 10 percent in the week leading up to its fourth-quarter report, though it remains up roughly 60 percent over the last 12 months. 3 Pressure points Several months of new developments in trade, geopolitics, and AI breakthroughs create new risks for Nvidia.

Nvidia Q4 Earnings Preview: A Make-or-Break Moment for the AI Trade? | Investing.com UK

Looking for actionable trade ideas to navigate the current market volatility? Subscribe here to unlock access to InvestingPro's AI-selected stock winners. As Nvidia (NASDAQ:NVDA) gears up to release its Q4 earnings report after the close on Wednesday, the tech sector and the broader market are on edge. Past earnings surprises from Nvidia have been market-moving events, and this quarter is unlikely to be an exception. The report arrives at a critical juncture, with the once-unstoppable tech rally showing signs of fatigue amid growing fears that the AI bubble may be on the verge of bursting. The Nasdaq Composite has slumped roughly 6% from recent highs, growth stocks are tumbling, and skepticism is mounting over whether the AI boom can justify sky-high valuations. Source: Investing.com As the bellwether of artificial intelligence, Nvidia's results won't just reflect its own performance -- they'll signal whether the AI narrative has legs or is unraveling beneath investor's feet. Here's what to expect and what it could mean for investors and beyond. Analysts are forecasting a blockbuster quarter. Profit estimates have been revised upward 33 times in recent weeks, according to an InvestingPro survey, with just five downward revisions, reflecting growing bullishness around Nvidia's earnings potential. Consensus estimates call for revenue at approximately $38.1 billion, a staggering 73% increase year-over-year. This figure edges out Nvidia's own guidance of $37.5 billion (plus or minus 2%), issued during its Q3 earnings call in November 2024. Net income is projected to soar to $21.08 billion, up from $12.84 billion in the same quarter last year, while earnings per share (EPS) are expected to hit $0.85, a 63% jump from $0.52 in Q4 FY2024. These numbers reflect Nvidia's unrelenting dominance in AI and graphics processing units (GPUs), fueled by robust demand from major tech players like Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Meta (NASDAQ:META), who are collectively pouring over $200 billion into AI infrastructure in 2025. Beyond the numbers, Nvidia's forward guidance for the current quarter will be critical. Analysts are projecting revenue of nearly $42 billion, and anything less -- or hints of cooling demand -- could rattle markets. The company's track record is impeccable, having beaten estimates in 16 of its last 18 quarters. However, whispers of emerging competition, notably from China's DeepSeek, which claims to train competitive AI models with less compute power, have sparked debate about Nvidia's long-term growth runway. NVDA stock, trading at $126.63 as of Wednesday morning, has climbed 61% over the past year, outpacing the S&P 500's 17% gain. Shares are sitting right at their 200-day moving average. Source: Investing.com With options markets pricing in a roughly 8% swing post-earnings, volatility is all but guaranteed. As such, investors should prepare for multiple outcomes: 1. A Blowout Quarter and Strong Guidance: If Nvidia beats expectations and raises guidance, the stock could surge to a new record above $150, boosting sentiment across the tech sector. That would help lift semiconductor peers like AMD (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO), as well as AI software stocks like Palantir (NASDAQ:PLTR) and Super Micro Computer (NASDAQ:SMCI). 2. An In-Line Report with Conservative Guidance: While Nvidia has a track record of exceeding expectations, conservative guidance could trigger short-term selling. This scenario might signal caution about overestimating the pace of AI adoption. 3. A Miss or Soft Guidance: Given Nvidia's high valuation, any disappointment could lead to a sharp selloff, impacting not just Nvidia but also other high-growth tech stocks. Investors may consider hedging through options or rotating into defensive sectors of the market. Those with long-term confidence in Nvidia might use any post-earnings dip as a buying opportunity. Nvidia's earnings have evolved into a market-moving event, given its outsized influence on the tech sector and the S&P 500. A beat-and-raise scenario, particularly with robust Q1 guidance, could reignite investor enthusiasm for AI-related investments, potentially reversing the recent pullback in growth stocks. Conversely, a miss could ripple through the tech sector, dragging down risk assets and raising questions about the sustainability of the AI-driven rally that has fueled markets since 2023. Nvidia's earnings will either inject adrenaline into the AI trade or confirm fears of a speculative bubble. For the broader market, the stakes couldn't be higher. A strong report could salvage the tech rally, while a miss could accelerate the ongoing rotation toward value stocks. Investors should brace for fireworks and position accordingly. Be sure to check out InvestingPro to stay in sync with the market trend and what it means for your trading. Whether you're a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market backdrop. Subscribe now and instantly unlock access to several market-beating features, including: Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY (NYSE:SPY)), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH). I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials.

The AI king speaks: Will Nvidia's earnings silence doubters?

Quarterly earnings from Nvidia (NVDA.O) on Wednesday stand as a significant event for markets amid investor scrutiny regarding substantial spending in artificial intelligence (AI). Nvidia's results could reassure investors questioning ongoing investments in AI technologies. Market estimates project Nvidia's fourth-quarter sales at $38.5 billion, with first-quarter guidance around $42.5 billion. Options indicate a potential share price move of about 8% in either direction should the results deviate from expectations. "This earnings report isn't just about Nvidia... It's about whether the AI revolution can maintain its breakneck pace," stated Jacob Falkencrone, global head of investment strategy at Saxo. Q3 Fiscal 2025 Summary - GAAP (Millions of USD, except EPS): Concerns regarding DeepSeek, a Chinese startup claiming to produce competitive AI technology at lower costs, have prompted increased scrutiny of major U.S. tech firms. However, Reuters sources report that Chinese companies have raised orders for Nvidia's H20 chip, responding to growing demand for cost-effective AI models. DeepSeek is reportedly hastening the launch of its R2 model, which could heighten U.S. government apprehension over AI leadership, viewed as a national priority. The technology tensions between the U.S. and China are expected to escalate, especially as the Trump administration prepares to implement stricter semiconductor export regulations and has already limited Chinese investments in strategic U.S. sectors. Amid these developments, Hong Kong-listed companies saw a 2.5% increase in shares, while technology stocks surged by 3.7% on Wednesday. In the U.S., Treasury yields have rebounded following the advancement of Trump's $4.5 trillion tax-cut plan, as investors remain cautious due to a deteriorating economic outlook and rising speculation about interest rate cuts from the Federal Reserve. Fed funds futures indicate more than 50 basis points of easing priced in by year-end, a substantial increase from the previous week's estimates. Nvidia is on track to complete a remarkable fiscal year, with analysts forecasting $38 billion in sales for the quarter ending in January, representing a 72% year-on-year growth. This January quarter marks the conclusion of a fiscal year in which Nvidia's sales have more than doubled, primarily driven by the essential role of its data center GPUs in developing and deploying AI services, such as OpenAI's ChatGPT. Over the past two years, Nvidia's stock has appreciated by 478%, occasionally achieving a market capitalization exceeding $3 trillion. However, Nvidia's stock has decelerated recently as investors question the chipmaker's trajectory amid signs that its key customers may be beginning to restrain spending following years of extensive capital expenditures. This wariness has been heightened by breakthroughs in AI technologies emerging from China. A significant portion of Nvidia's revenue is generated from major companies constructing extensive server farms, known as "hyperscalers," which typically rent services to other firms. Reports from February indicated that a single customer accounted for 19% of Nvidia's total revenue in fiscal 2024. Recent estimates from Morgan Stanley suggest that Microsoft will constitute nearly 35% of spending in 2025 on Nvidia's latest AI chip, Blackwell, with Google at 32.2%, Oracle at 7.4%, and Amazon at 6.2%. Consequently, any indication that Microsoft or its competitors might curb their spending could negatively impact Nvidia's stock performance. TD Cowen recently reported that Microsoft had canceled leases with private data center operators and revised its plans for international data centers in favor of domestic initiatives, sparking concerns about the sustainability of AI infrastructure growth and posing potential challenges for Nvidia's chip demand. In response, Microsoft reaffirmed plans to invest $80 billion in infrastructure in 2025, asserting, "While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions." Over the past month, Nvidia's primary customers have announced sizable investments, including Alphabet's targeted $75 billion in capital expenditures for the year, Meta's anticipated $65 billion, and Amazon's goal of $100 billion. Analysts estimate that around half of AI infrastructure capital expenditures are captured by Nvidia. Despite some hyperscalers exploring AMD's GPUs and developing proprietary AI chips to reduce reliance on Nvidia, the corporation continues to dominate the cutting-edge AI chip market. Currently, Nvidia's chips are primarily utilized for training advanced AI models, which entail significant costs. After the development phase by firms such as OpenAI, Google, and Anthropic, vast amounts of Nvidia GPUs are necessary to operationalize these models for consumer use, predicting continued revenue growth for Nvidia. The emergence of DeepSeek last month introduced an efficient AI model that indicated top-tier Nvidia GPUs might not be required for training and utilizing cutting-edge AI, temporarily depressing Nvidia's stock and resulting in a significant loss of nearly $600 billion in market capitalization. Nvidia CEO Jensen Huang is set to address these concerns on Wednesday, focusing on the continued demand for GPU capacity in the AI sector. Huang has referred to a "scaling law" articulated by OpenAI in 2020, suggesting that AI models improve with increased data and compute usage. He has indicated that the DeepSeek model may represent a new aspect of this scaling law, termed "Test Time Scaling," which posits that enhancing AI operational deployment will necessitate more GPU resources. According to Bloomberg, Wall Street anticipates Nvidia will report earnings per share (EPS) of $0.84 on revenue of $38.2 billion for the quarter ending in January. While this reflects a 63% increase in EPS and a 73% rise in revenue compared to the previous year, investor expectations may render this growth underwhelming, especially considering last year's figures of 486% EPS growth and a 265% revenue increase in Q4. Nvidia's data center segment is expected to yield the majority of its revenue, estimated at $34 billion, with the gaming sector contributing approximately $3 billion. The remaining revenue is projected to come from professional visualization, automotive, and OEM segments. Nvidia shares are down more than 5% year-to-date, reflective of challenges faced by major tech firms, including a nearly 7% decline for Alphabet, 3% for Amazon, over 5.5% for Microsoft, and over 1% for Apple. In contrast, Meta has experienced a better performance, with shares increasing by over 10%. This earnings report is Nvidia's first since the significant market impact caused by DeepSeek's announcement and the subsequent $600 billion market cap loss in January. Concerns were raised when DeepSeek claimed functionality comparable to that of higher-end Nvidia chips, leading to fears regarding the viability of Nvidia's more powerful processors. In an interview with DDN CEO Alex Bouzari, Huang argued that utilizing high-performance chips for running models such as DeepSeek's would actually drive demand for superior processors rather than diminish it. Nvidia also faces risks associated with potential tariffs on chips from Taiwan, as it collaborates with TSMC, which manufactures many of those chips. Trump has threatened potential tariff actions on Taiwanese imports and further restrictions on Nvidia chips supplied to China, jeopardizing revenue from significant markets. While the majority of Nvidia's revenue is generated from the U.S., where it earned $14.8 billion from $35 billion in sales during Q3, China remains an important market, contributing $5.4 billion and ranking third behind Singapore's $7.6 billion intake. Concerns have also been raised about the potential effects of Amazon, Google, Microsoft, and Meta developing custom AI chips that could rival Nvidia's performance capabilities. If these custom solutions can achieve comparable results to Nvidia's offerings, the demand for Nvidia chips may decrease significantly. Cloud service providers, including Amazon, Google, and Microsoft, account for 50% of Nvidia's data center revenue, meaning any loss in business from these firms would substantially impact Nvidia's financial outcomes. However, Morgan Stanley Research analyst Joseph Moore advised caution against overreacting to such potentiality, drawing on past experiences with numerous Nvidia alternatives that initially garnered interest but ultimately fell short of establishing lasting market traction. While Google and Amazon's custom chips have shown potential, Moore asserts that Nvidia continues to expand its share within the AI domain.

Nvidia reports fourth-quarter earnings after the bell

Here's what Wall Street is expecting, according to LSEG consensus estimates: Nvidia's earnings report on Wednesday will put the finishing touches on one of the most remarkable years from a large company ever. Not only do analysts expect a 72% increase in revenue in the quarter ended in January, but sales for the full fiscal year are expected to more than double to nearly $130 billion. The company's growth streak has been driven by the fact that its data center graphics processing units, or GPUs, are essential hardware for building and deploying artificial intelligence applications like OpenAI's ChatGPT. In the past two years, Nvidia stock has risen more than 440%, and it's been the most valuable U.S. company at times with a market cap over $3 trillion. But the stocks' meteoric growth has slowed in recent months -- it's trading at the same price as it did last October. Slowing the company's appreciation are questions from investors about what Nvidia does next, and if it can keep growing. Nvidia CEO Jensen Huang will get an opportunity on Wednesday to answer lingering questions from investors and analysts about what the AI boom looks like two years in. In particular, Nvidia investors are worried about any signs that the company's most important customers -- hyperscale cloud companies -- might be tightening their belts after years of big capital expenditures. They were also shaken by a Chinese AI model, DeepSeek's R1, which challenged assumptions that more Nvidia chips would be needed to build smarter AI. There's also a possibility that attention on DeepSeek could prompt U.S. officials to further restrict Nvidia's exports of AI chips to China on national security grounds. Nvidia is already barred from shipping its most advanced AI chips to the region, and it makes specially limited versions of its chips specifically for China. Additionally, investors will want to know how the Blackwell rollout is going after reports that distribution of some versions of Nvidia's latest AI chip may be happening slower than previously expected due to heating and yield challenges. Morgan Stanley analysts estimated this month that Microsoft will account for nearly 35% of spending in 2025 on Blackwell, Google is at 32.2%, Oracle at 7.4% and Amazon at 6.2%. Last week, TD Cowen analysts said they had learned that Microsoft had canceled leases with private data center operators and had slowed its process of negotiating to enter into new leases. The report raised fears about the sustainability of AI infrastructure growth, of which a large portion of spending is on Nvidia's chips. Microsoft pushed back Monday, saying it still planned to spend $80 billion on infrastructure in 2025. Plus, most of Nvidia's other key customers touted large investments. Alphabet is targeting $75 billion in capital expenditures this year, Meta will spend as much as $65 billion and Amazon is aiming to spend $100 billion. "We have talked to industry participants over the weekend, and while it's certainly possible that there are longer lead time changes relating to land, the Microsoft GPU demand has not changed," wrote Morgan Stanley analyst Joseph Moore in a note this week. He has a $152 price target on Nvidia stock. Still, investors will be listening for any signs that Nvidia's relationship with cloud companies remains strong. They'll also be listening to Nvidia's guidance for its fiscal 2026, and how much growth over last year's elevated sales can be expected.

Nvida to report earnings amid infrastructure spending, DeepSeek concerns

Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the opening ceremony of the Siliconware Precision Industries Co. (SPIL) Tan Ke Plant in Taichung, Taiwan, on Thursday, Jan. 16, 2025. Nvidia is scheduled to report fourth-quarter financial results on Wednesday after the bell. It's expected to put the finishing touches on one of the most remarkable years from a large company ever. Analysts polled by FactSet expect $38 billion in sales for the quarter ended in January, which would be a 72% increase on an annual basis. The January quarter will cap off the second fiscal year where Nvidia's sales more than doubled. It's a breathtaking streak driven by the fact that Nvidia's data center graphics processing units, or GPUs, are essential hardware for building and deploying artificial intelligence services like OpenAI's ChatGPT. In the past two years, Nvidia stock has risen 478%, making it the most valuable U.S. company at times with a market cap over $3 trillion. But Nvidia's stock has slowed in recent months as investors question where the chip company can go from here. It's trading at the same price as it did last October, and investors are wary of any signs that Nvidia's most important customers might be tightening their belts after years of big capital expenditures. This is particularly concerning in the wake of recent breakthroughs in AI out of China. Much of Nvidia's sales go to a handful of companies building massive server farms, usually to rent out to other companies. These cloud companies are typically called "hyperscalers." Last February, Nvidia said a single customer accounted for 19% of its total revenue in fiscal 2024. Morgan Stanley analysts estimated this month that Microsoft will account for nearly 35% of spending in 2025 on Blackwell, Nvidia's latest AI chip. Google is at 32.2%, Oracle at 7.4% and Amazon at 6.2%. This is why any sign that Microsoft or its rivals might pull back spending plans can shake Nvidia stock. Last week, TD Cowen analysts said that they'd learned that Microsoft had canceled leases with private data center operators, slowed its process of negotiating to enter into new leases and adjusted plans to spend on international data centers in favor of U.S. facilities. The report raised fears about the sustainability of AI infrastructure growth. That could mean less demand for Nvidia's chips. TD Cowen's Michael Elias said his team's finding points to "a potential oversupply position" for Microsoft. Shares of Nvidia fell 4% on Friday. Microsoft pushed back Monday, saying it still planned to spend $80 billion on infrastructure in 2025. "While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions. This allows us to invest and allocate resources to growth areas for our future," a spokesperson told CNBC. Over the last month, most of Nvidia's key customers touted large investments. Alphabet is targeting $75 billion in capital expenditures this year, Meta will spend as much as $65 billion and Amazon is aiming to spend $100 billion. Analysts say about half of AI infrastructure capital expenditures ends up with Nvidia. Many hyperscalers dabble in AMD's GPUs and are developing their own AI chips to lessen their dependence on Nvidia, but the company holds the majority of the market for cutting-edge AI chips. So far, these chips have been used primarily to train cutting-edge AI models, a process that can cost hundreds of millions dollars. After the AI is developed by companies like OpenAI, Google and Anthropic, warehouses full of Nvidia GPUs are required to serve those models to customers. That's why Nvidia projects its revenue to continue growing. Another challenge for Nvidia is last month's emergence of Chinese startup DeepSeek, which released an efficient and "distilled" AI model. It had high enough performance that suggested billions of dollars of Nvidia GPUs aren't needed to train and use cutting-edge AI. That temporarily sunk Nvidia's stock, causing the company to lose almost $600 billion in market cap. Nvidia CEO Jensen Huang will have an opportunity on Wednesday to explain why AI will continue to need even more GPU capacity even after last year's massive build-out. Recently, Huang has spoken about the "scaling law," an observation from OpenAI in 2020 that AI models get better the more data and compute are used when creating them. Huang said that DeepSeek's R1 model points to a new wrinkle in the scaling law that Nvidia calls "Test Time Scaling." Huang has contended that the next major path to AI improvement is by applying more GPUs to the process of deploying AI, or inference. That allows chatbots to "reason," or generate a lot of data in the process of thinking through a problem. AI models are trained only a few times to create and fine-tune them. But AI models can be called millions of times per month, so using more compute at inference will require more Nvidia chips deployed to customers. "The market responded to R1 as in, 'oh my gosh, AI is finished,' that AI doesn't need to do any more computing anymore," Huang said in a pretaped interview last week. "It's exactly the opposite."

Nvidia to report first earnings since shock debut of Chinese AI DeepSeek

Investors will be eyeing firm's financials for signs of slowing demand after revelation high-end chips not necessary Nvidia will deliver its earnings report for the fourth quarter of 2024 Wednesday evening, which investors will be watching closely for any signs of slowing demand for semiconductor chips. The chipmaker's financials will face scrutiny over possible signals of an end to the AI-fueled market boom that has propelled the company to a stratospheric valuation of $3.1tn. Analysts expect Nvidia to maintain its leadership position as the maker of the AI industry's favorite chips, but recent news has presented new potential challenges to the company's ownership of the market. For one, analysts at TD Cowen published findings earlier in the week that Microsoft, one of Nvidia's biggest customers, was cancelling leases with private data center operators. Investors expressed concerns about the sustainability of mass investment into AI infrastructure, including Microsoft's $80bn, which would mean less spending on Nvidia's wares. This earnings call will also be the first look at the company's financials and demand since China's DeepSeek AI introduced an AI model that beat many of those made in the US while requiring a fraction of the training and investment. The introduction of DeepSeek initially sent Nvidia's valuation tumbling by hundreds of billions because the Chinese AI seemed to show that new models did not necessarily need to rely on Nvidia's most expensive, top-of-the-line graphics processing unit (GPU), as most cutting-edge models out of the US do. Despite the company's past stellar performance, analysts expect investors to look for other signs that the company will be capable of meeting the moment as demand for the chips that power AI models remains steady. "The key question for Nvidia's Q4 earnings isn't just about the numbers, but whether the company can maintain its commanding position as AI evolves," said Jacob Bourne, a technology analyst at eMarketer. "Even if Nvidia posts another quarter of stellar growth, the market reaction will depend on how well it can convince investors that it can tackle these challenges." Some analysts predict the ripples from DeepSeek's launch may not have an immediate impact on Nvidia but could allow competitors like AMD and Intel to "gain a foothold on the lower end of the AI infrastructure market", said Alvin Nguyen, a senior analyst at Forrester. "DeepSeek has established a new and lower base of performance for generative AI (specifically for chain-of-thought/reasoning models), allowing for more organisations to experiment with AI," Nguyen added.

Nvidia earnings have analysts optimistic the DeepSeek selloff was just a blip

Nvidia's DeepSeek opportunity, Gemini 2.0 for all,and OpenAI's TV debut: AI news roundup The chipmaker is expected to report revenue of $38.1 million, according to analysts' estimates compiled by FactSet (FDS+0.54%). "Nvidia's upcoming earnings will crush the DeepSeek anxiety," Kevin Cook, senior stock strategist at Zacks Investment Research, said in comments shared with Quartz. The company dominates "the technology stack that enterprises want and the next stacks they don't even know they need yet," Cook said. After the Chinese artificial intelligence startup spooked investors with its competitive reasoning models in January, Nvidia's stock plunged 17%, wiping out nearly $600 billion in value -- a record loss for a U.S. company. In December, the Hangzhou-based company released DeepSeek-V3, a model it said cost just $5.6 million to train and develop on Nvidia's reduced-capability H800 chips. DeepSeek's AI models -- which demonstrated performance on par with those from OpenAI and Meta (META-3.08%) for seemingly thousands of chips and billions of dollars less -- brought Big Tech's big spending on AI into question ahead of a spate of results from Alphabet, Amazon (AMZN-3.03%), Meta, and Microsoft. While investors waited to see if the tech giants "would lower their bold data center capex projections," spending instead grew to $325 billion, Cook said. "This is a long-term buildout for these goliaths," Cook said, adding that companies are not looking for immediate returns on investment, but are rather making "a three to five-year bet when their infrastructure" will be crucial to future AI development. Despite the declining costs of training and running generative AI models, "that doesn't necessarily reflect overall spending on generative AI," John Belton, a portfolio manager at Gabelli Funds, said in comments shared with Quartz. While "DeepSeek didn't introduce anything fundamentally new" about lower costs leading to higher AI adoption, Belton said, "it did slightly accelerate the rate at which training costs are declining." However, DeepSeek's advancements could have a near-term impact on Nvidia and other chipmakers as U.S. officials weight stricter export controls on China, Belton said. On Tuesday, Reuters reported that Chinese AI firms including Tencent (TCEHY+1.35%), Alibaba (BABA+3.83%), and ByteDance are "significantly" increasing orders of Nvidia's H20 chips as demand rises for lower-cost AI models such as those from DeepSeek. The H20 chip was designed specifically by Nvidia to comply with existing export controls targeting China, and is less advanced than chips being sold to U.S. firms. Another area of concern, Cook said, is gross margins as Nvidia delivers its Blackwell chipset, which "has been rumored to have overheating issues that may drive up costs." Investors could be spooked if gross margins fall below 73%, he added. Analysts at Jefferies (JEF-1.11%) said in a note that it still expects Nvidia to deliver a beat and a raise despite supply chain issues with Blackwell. Meanwhile, FactSet analysts are expecting Nvidia to set fiscal first quarter guidance at $42 billion. "I think there was concern that DeepSeek would lead major companies to cut capital expenditures," Joe Tigay, portfolio manager of the Catalyst Nasdaq-100 Hedged Equity Fund, said in comments shared with Quartz. "However, we've seen significant capex from these companies, and the market no longer seems worried about it. Nvidia's guidance should further confirm that."

Nvidia's Shaken Aura of Invincibility Is Set for Earnings Test

Nvidia Corp.'s earnings are set to dictate whether artificial intelligence can regain its status as the key driver behind Wall Street gains -- or trigger more weakness after the Magnificent Seven group of technology stocks fell into correction territory. Reports from the leader in AI chips have become some of the most important events of the year for Wall Street. Nvidia's fourth-quarter earnings due after Wednesday's close may be its most critical yet, coming after the emergence of China-based startup DeepSeek scrambled the outlook for AI infrastructure needs.

Nvidia benefits from a first-mover disadvantage

NEW YORK, Feb 25 (Reuters Breakingviews) - Nvidia (NVDA.O), opens new tab depends, at least somewhat, on a first-mover disadvantage. The chipmaker led by Jensen Huang should report another quarter of breakneck growth on Wednesday, with analysts expecting earnings to skyrocket 60% year-over-year to $21 billion, according to LSEG data. Efficiency breakthroughs and uncertain payoffs threaten the artificial intelligence splurge boosting the company. For now, though, customers have more to lose from cutbacks. The company behind the industry-standard chips powering AI has grown revenue tenfold in the past five years, with shareholders enjoying a total return exceeding 1,800%. As systems grow in complexity and ubiquity, Nvidia benefits. Insatiable demand and resultant shortages boosted pricing power, lifting the company's gross margin to an astonishing 75% last quarter. Such growth means that the stock's stellar performance isn't indefensibly overheated, with the company trading at 29 times estimated earnings over the next 12 months. That's roughly in the ballpark of other tech behemoths. But a few select customers drive results: just 3 of them generated 36% of revenue last quarter. Microsoft (MSFT.O), opens new tab, Amazon.com (AMZN.O), opens new tab, Alphabet (GOOGL.O), opens new tab and Meta Platforms (META.O), opens new tab are projected to spend over $300 billion on capital investment this year, up about a third from 2024. If they pull back, things could change quickly. There are reasons to fear just that. China's DeepSeek claimed to train AI models with astonishing efficiency, raising questions over the necessity of chip spending and slicing Nvidia's market value by roughly $600 billion in a day. If bleeding-edge chatbots are less costly, competition might rise and profit margins fall, curbing enthusiasm. Nonetheless, revenue for 2024's final quarter is expected to have risen 72% year-over-year. Look at it this way: being the first to break ranks on spending is risky. The potential payout from cracking a huge leap in AI capabilities could be enormous. Ensuring rivals don't monopolize a breakthrough is similarly existential. And investors want to be in the race, pushing AI spenders' valuations up since ChatGPT's 2022 release. To boot, canceling orders means moving to the back of a crowded line if bosses reverse course, especially given chip buyers' habit of doubling up orders when supplies are scarce to ensure a buffer. This creates a classic fear of missing out, or FOMO. But the balance is delicate. Past boom-and-busts like the 2000s telecommunications frenzy suggest that, when everyone retreats at once, things can get ugly. Just blunting Nvidia's pricing power would be severe: a reduction in gross margin to a still-rich 60% would wipe out the equivalent of a recent quarter's worth of earnings over the course of a year, all else equal. For now, Huang benefits from a bit of peer pressure. Follow @rob_cyran, opens new tab on X CONTEXT NEWS Nvidia is set to report results for the fourth quarter of 2024 on February 26. Analysts expect the semiconductor company to have generated revenue of $38 billion, according to data collected by LSEG, a 72% increase from the same period last year. Nvidia is expected to earn $20.9 billion, up from $12.8 billion a year prior. Editing by Jonathan Guilford and Pranav Kiran Suggested Topics:Breakingviews Breakingviews Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors. Rob Cyran Thomson Reuters Robert Cyran, U.S. tech columnist, joined Breakingviews in London in 2003 and moved four years later to New York, where he continues to cover global technology, pharmaceuticals and special situations. Robert began his career at Forbes magazine, where he assisted in the startup of the international version of the magazine. Before working at Breakingviews he worked as a market researcher and reporter covering the pharmaceutical industry. Robert has a Masters degree in economics from Birmingham University and an undergraduate degree from George Washington University.

Nvidia Earnings: Can It Maintain AI Dominance Amid DeepSeek's Challenge?

DeepSeek's Rise Triggers $593 Billion Drop in Nvidia's Market Value Nvidia's upcoming earnings report will reveal whether demand for its artificial intelligence chips remains robust as competition intensifies. With China's DeepSeek launching low-cost AI models, investors are questioning Nvidia's continued dominance. The stakes are high, especially after DeepSeek's rise led to a historic $593 billion drop in Nvidia's market value. The company has been a major beneficiary of AI-driven investments by tech giants over the last two years. However, DeepSeek's models claim to rival Western counterparts at a fraction of the cost. This has led investors to question whether Nvidia's chips remain essential for AI advancements. rise in January caused Nvidia's market value to drop by $593 billion. It was the largest single-day loss for any U.S. company. Despite this, Nvidia's stock performed well in 2023 and 2024. Spear Invest's Chief Investment Officer Ivana Delevska noted investor concerns about DeepSeek's impact. She stated that if Nvidia continues to exceed expectations, its stock performance may remain strong. is expected to report a 72% revenue increase to $38.05 billion for the fourth quarter, based on LSEG data. This marks its slowest growth in seven quarters. The company is likely to project a 60% revenue increase for the first quarter ending in April. In previous quarters, Nvidia recorded five straight periods of triple-digit revenue growth until October. Demand for remains strong. Key customers including Microsoft and Meta have reaffirmed their commitment to large-scale data center investments. Gabelli Funds portfolio manager John Belton highlighted that capital expenditure plans from Meta, Microsoft, Google and Amazon indicate strong near-term demand for Nvidia. Shipments of Blackwell chips likely increased in the fourth quarter, driving revenue growth. However, this expansion also put pressure on profit margins due to the complexity of manufacturing new chips. Analysts expect Nvidia's adjusted gross margin to decline by over three percentage points to 73.5% in the fourth quarter. Lately, Nvidia has shifted from selling individual chips to full AI computing systems like the GB200 NVL72. These systems bundle GPUs, CPUs, and networking equipment, adding complexity to production. Taiwan's TSMC, Nvidia's contract manufacturer, has struggled to expand capacity for advanced packaging, a critical step in AI chip production. Initial Blackwell production faced design flaws and low chip yields. Nvidia has since resolved these issues. In November the company stated that Blackwell's revenue would surpass initial projections of several billion dollars in the fourth quarter. Belton acknowledged the challenges in launching Blackwell. He suggested that Nvidia's earnings might not show the level of outperformance that investors have come to expect. The launch's complexity and supply chain constraints could impact near-term delivery.

Nvidia earnings preview: Watching for DeepSeek AI fallout

Why it matters: China-based DeepSeek's new AI model turned heads earlier this year with its stunning efficiency, raising questions about whether investment in the most advanced and costly chips is as necessary as once thought. The big picture: Nvidia earnings have turned into a major quarterly event for a stock market increasingly driven by the AI economy. Between the lines: Investors will looking specifically for any signs that tech customers are slowing their pace of capital expenditures. Yes, but: While Nvidia's chips dominate demand for AI model training, only 40% of its GPUs are used for an increasingly important next phase, called inference training, according to Morningstar. What we're watching: Nvidia, however, may be ready for the transition. Its next-gen Blackwell chips are specifically "geared toward inferencing applications," S&P says. The bottom line: Nvidia's ability to navigate the ever-shifting AI economy is being put to the test.

Nvidia gives Silicon Valley heartburn every three months

Why it matters: It's risky when any industry hangs so much of its hopes on one company's results, and Nvidia's enviable record of beating expectations means the slightest faltering could trigger a rout. Driving the news: Today, markets await the chipmaker's first report since the arrival of DeepSeek's latest model last month cast a brief shadow over Nvidia's glow. Yes, but: Tech giants and startups in the U.S. and around the globe continue to pour hundreds of billions into AI infrastructure, new model training and data centers. The big picture: There are three broader reasons to think that Nvidia could disappoint investors, if not this week then eventually. 1. The market is over-concentrated. 2. Demand for AI remains elusive. 3. The AI chip market is uniquely vulnerable to geopolitical risk. The other side: Nvidia could keep outperforming expectations for a long time. The bottom line: Silicon Valley's 75-year history has been one long cycle of booms and busts. With AI it shows every sign of continuing that pattern.

Wall Street Week Ahead

Listen on the go! A daily podcast of Wall Street Breakfast will be available by 8:00 a.m. on Seeking Alpha, iTunes, Spotify. Investors this week will be on the lookout for the print of the PCE Price Index for January on Friday. That's the Fed's preferred inflation gauge. The second estimate for fourth-quarter gross domestic product in the U.S. is due Thursday, along with durable goods data for last month. The highlight of next week's earnings calendar will be the world's most valuable chipmaker, Nvidia (NVDA) on Wednesday. Analysts at KeyBanc Capital Markets expect the company to offer up "strong" results and guidance when it reports quarterly results next week, despite the GB200 NVL constraints it has faced. Nvidia (NVDA) is set to report earnings this week on Feb. 26 after the bell. The market expects about $38.1B in sales and $0.84 in normalized EPS. The top-line number will be especially important here, as the market will look for signs of continued growth, specifically in the lucrative enterprise AI GPU segment. While Nvidia guided to only $37.5B in sales for Q4, Nvidia often sandbags its forecasts, making it easier to provide better-than-anticipated results for the AI market leader. Therefore, Nvidia could provide $38-39B in sales while potentially delivering a minor beat on the EPS side. Guidance is particularly crucial, as the market wants to see continued robust demand for Nvidia's AI products despite the recent DeepSeek and other concerning events. Despite the high expectations, I anticipate Nvidia can provide another constructive earnings report, which should support its stock price trajectory and the trajectory of other high-quality AI picks. Discover more analysis from Victor Dergunov with his SA Investing Group service - The Financial Prophet. In case you missed it ...