Nvidia's Earnings Report Poised to Sway Jittery Stock Market

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Artificial intelligence chipmaker Nvidia is set to deliver its quarterly earnings report on Wednesday, which is likely to have a significant impact on the jittery stock market. Analysts are projecting a 68% increase in Nvidia's revenue and a more than 70% rise in profit compared to the previous year, as the company's chipsets have emerged as the best building blocks for AI. However, investors have become increasingly skeptical about whether AI will live up to the hype, and Nvidia's stock price has faced volatility despite the company's stellar performance in recent quarters.

Why it matters

Nvidia's earnings report is crucial for the stock market as the company has become a market-moving force, with its stock accounting for around 7% of the benchmark S&P 500 index. The performance of Nvidia's chips is seen as a bellwether for the broader AI industry, and the company's results could sway investor sentiment on the technology's potential.

The details

Nvidia has regularly exceeded analyst forecasts in the past three years, often by a wide margin. However, this hasn't always been enough to satisfy investors who have become increasingly skeptical about whether AI will live up to the hype. The fervor around AI has escalated further in the past month, with four leading tech companies - Amazon, Microsoft, Google parent Alphabet, and Facebook parent Meta Platforms - collectively committing to spend about $650 billion this year to ramp up their AI computing power, much of which is expected to be spent on Nvidia chips.

• Nvidia's quarterly report will be delivered on Wednesday, covering the company's fiscal quarter from November through January.
• Last October, Nvidia briefly became the first company to surpass a $5 trillion market value before doubts about AI pulled its stock price back.

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