Why investors are on tenterhooks for Nvidia’s latest earnings report

Chip elephantine Nvidia is acceptable to merchandise its latest net study – and the results could determination the full US banal market.

Over the past 2 years, the chipmaker has risen to go the world’s astir invaluable company, with a marketplace capitalisation of much than $4 trillion.

When Nvidia announces its net connected Wednesday, investors volition get to spot however the tech elephantine has been faring amid the tumult of President Donald Trump’s commercialized salvoes and concerns astir whether artificial quality has been overhyped.

Why is Nvidia truthful important?

Nvidia specialises successful making the graphics processing units (GPUs) that powerfulness AI, including the Blackwell B200, marketed arsenic the world’s astir almighty chip.

The California-based company’s chips person go indispensable to the world’s largest tech companies, including Microsoft, Meta, Amazon and Alphabet, since AI exploded into the mainstream with the merchandise of OpenAI’s generative AI chatbot, ChatGPT, successful November 2022.

The company’s portfolio besides includes information centres and gaming.

Nvidia posted yearly gross of $130.5bn for the past fiscal year, which ended successful precocious January.

What volition the marketplace beryllium looking for successful Nvidia’s net report?

Analysts volition beryllium examining assorted metrics, including the company’s quarterly revenue.

Nvidia’s gross has been increasing astatine breakneck velocity for the past respective years, acknowledgment to the AI roar and the surge successful request for its chips.

Nvidia posted triple-digit gross maturation for 5 consecutive quarters betwixt mid-2023 and 2024, according to institution filings.

Since then, yearly gross maturation has coasted successful the precocious treble digits.

Last quarter, the institution reported gross of $44.1bn, a 69 percent summation from the aforesaid play a twelvemonth ago.

While specified figures would beryllium the envy of immoderate company, the firm’s explosive show has besides raised questions astir however agelong its stellar tally tin last.

In beforehand of its forthcoming net study – which covers the 2nd 4th of fiscal twelvemonth 2026 – Nvidia has said it expects gross of $45bn positive oregon minus 2 percent.

Analysts person predicted gross of up to $46bn, oregon 53 percent maturation year-on-year.

The net study is besides expected to amusement signs of whiplash from the Trump administration’s tariff war.

In April, Trump banned Nvidia from selling its H20 spot – specially designed for the Chinese marketplace – to China. At the time, Nvidia said the prohibition would outgo the institution $8bn.

Trump aboriginal walked backmost the prohibition erstwhile Nvidia agreed to stock 15 percent of its H20 spot income with the US government, a woody that was finalised connected August 11, 2 weeks aft the extremity of its 2nd quarter.

Why is determination interest that AI is overhyped?

As Silicon Valley pours billions into AI, immoderate observers, specified arsenic OpenAI CEO Sam Altman, person questioned whether determination is simply a bubble.

“Are we successful a signifier wherever investors arsenic a full are overexcited astir AI? My sentiment is, yes,” Altman told The Verge successful an interrogation earlier this month.

He is not the lone 1 who is worried.

Analysts person drawn parallels to the illness of the “Nifty Fifty” successful the 1970s, said Arun Sai, elder multi-asset strategist astatine Pictet Asset Management successful the United Kingdom.

The Nifty Fifty was a radical of 50 of the astir invaluable companies successful the US, including Xerox and IBM.

Though highly profitable, the firms became highly overvalued successful the precocious 1960s and aboriginal 70s.

When the bubble burst pursuing the 1973-74 banal marketplace crash, the worth of Nifty Fifty stocks fell by much than 50 percent.

“They were fantastic companies, but they were trading connected the incorrect price,” Sai told Al Jazeera.

“This is the aged conception of you could beryllium a large company, but not a large banal if the terms is wrong.”

What’s up with the Magnificent Seven?

Five decades later, immoderate investors are asking whether the “Magnificent Seven” – Nvidia, Alphabet, Amazon, Apple, Meta, Microsoft, and Tesla – could beryllium overvalued arsenic well.

Valuations person soared into the trillions of dollars connected the backmost of the AI boom, though determination is immoderate divergence wrong the group, with Apple and Tesla faring little good recently.

Amazon precocious said it expects to walk $85bn connected AI implicit the adjacent year, portion Microsoft predicts it volition walk $100bn.

AI has been 1 of the fewer agleam spots successful an different slowing system that has been undergoing upheaval since Trump took office.

“Growth is dwindling successful different sectors, but determination is this precise small, niche, concentrated pouch of hyper growth,” Sai said. “This abruptly becomes a overmuch bigger contributor to US GDP maturation than it would person been successful a mean signifier of the cycle.”

Corporate spending connected AI has been likened to an arms race, but tech giants – and Nvidia customers – volition besides sooner oregon aboriginal request to amusement investors that their betting connected the assemblage volition pb to profits.

US tech giants are already facing challenges from companies similar China’s DeepSeek, which made planetary headlines successful January erstwhile it unveiled a almighty but overmuch cheaper AI model.

So far, innovation does not look to beryllium translating into higher returns.

In a caller survey by Massachusetts Institute of Technology (MIT), 95 percent of enterprises looked astatine reported nary instrumentality connected their AI investments contempt the billions ploughed into the sector.

How overmuch could Nvidia’s latest net determination the market?

Because of its sky-high valuation, Nvidia unsocial makes up astir 8 percent of the S&P500 – the benchmark scale of 500 apical companies listed connected the US banal market.

That means Nvidia’s net person the imaginable to person a important impact, bully oregon bad, connected the banal marketplace arsenic a whole.

Big movements successful Nvidia’s banal terms person triggered swings successful the S&P 500 of 1 percent oregon much successful the past.

After Nvidia’s net results successful February sent its stock terms down much than 8 percent, the S&P 500 fell 1.6 percent.