Analysts assert that Nvidia’s profits have garnered as much attention for American marketplaces as fundamental economic figures have, with the technology giant set to reveal its quarterly financial performance, influencing investors’ perception of the AI industry’s soundness. As of Wednesday, the S&P 500 and the Nasdaq Composite Future indices appeared steady before Nvidia’s upcoming Q2 figures post trading session, while the Stoxx Europe 600 rose by half a percentage point.
This year has seen Nvidia’s stock skyrocket by 160%, driven by an explosive interest in AI—powered by the company’s chips—taking the company’s market value to $3.1 trillion, or €2.8 trillion, trailing only Apple. The company represents approximately a 6% share of S&P 500 and contributes to more than one-fourth of the index’s 18% year-to-date growth.
Deutsche Bank analysts claim Nvidia’s performance now makes it “a significant event in the economic schedule,” with its recent results sparking similar market fluctuations as those observed when unforeseen data surfaces regarding American employment or consumer prices index. The bank pointed out that the S&P grew by 2.1% a day after Nvidia’s results were publicised in February, marking the year’s second-highest day-to-day increase. The S&P 500 finished Tuesday slightly higher, nearing an all-time high.
One financial manager couldn’t recall another corporate performance report more anticipated. “It would be surprising if the share price didn’t exhibit a strong reaction this evening,” they noted.
The onset of the month saw global markets take a hit as debilitating US employment statistics triggered a significant drop in American equity markets. Michael Field, a stock market strategist at Morningstar, suggested Nvidia’s earnings could reverberate throughout the market. “We find ourselves in an unsteady phase. Even though we’ve mostly recuperated from the August slump, the Volatility Index remains high,” he remarked.
The future performance of other technology shares is likely to be influenced by the outcome of Nvidia’s corporate earnings due to its status as a trendsetter in the Artificial Intelligence (AI) revolution that has boosted the market value of American behemoths such as Apple and Microsoft. Nikolaos Panigirtzoglou, an analyst at JPMorgan, noted that while retail investors display a positive attitude towards technology stocks, hedge funds and equity mutual funds remain circumspect about American tech ventures. Nvidia is predicted to announce a revenue figure of $28.7 billion for the quarter, which signifies a twofold increase on a year on year basis. However, speculations about possible setbacks to its upcoming Blackwell chips have raised concerns among investors. Additionally, investors are wary that expenditure on AI-focused chips might decrease. (Credit: The Financial Times)