Nvidia’s Earnings Awaited as AI Market Faces Scrutiny

NEW YORK, NY – Nvidia‘s quarterly earnings report, set to be released after the bell on Wednesday, is being closely watched by investors eager for insight into the future of the artificial intelligence market. Jay Woods, chief market strategist at Freedom Capital Markets, described this week as a significant moment for the stock and the market.

Woods emphasized the importance of Nvidia’s performance, noting that the company constitutes nearly 8% of the S&P 500 and 10% of the Nasdaq-100. The report comes at a time when the Nasdaq Composite is attempting to end a seven-month winning streak, and many are questioning the high valuations associated with major tech stocks.

“It’s not hyperbole,” Woods said. “This is the most important earnings report of the year. Nvidia is going to move markets.” Currently, Nvidia’s stock trades around $186 per share after a rise of over 38% year to date, although it has dropped nearly 8% this month.

Investors are particularly curious about Nvidia’s guidance regarding its GPU depreciation cycles, with Woods highlighting a critical support level at $185. If Nvidia maintains its standing above this threshold, it could suggest positive momentum moving forward.

Other economic events this week include the release of September’s nonfarm payrolls report on Thursday, following the record-setting U.S. government shutdown, as well as Fed speeches from Governors Stephen Miran and Lisa Cook.

Furthermore, Woods will be monitoring the earnings reports from retail giants like Home Depot and TJX Companies. He noted that Home Depot’s stock must surpass $380 and that TJX needs to maintain above $145 to sustain its recent rally.

Nvidia’s results are not just crucial for tech investors; they are significant indicators of the broader market’s health amid rising concerns about the sustainability of the AI-driven rally. Recent comments from investment figures like Michael Burry, who warned of a potential AI bubble, have intensified scrutiny over the tech sector’s current valuations.

If Nvidia can deliver strong results, it may alleviate some concerns among investors. However, analysts are increasingly uncertain about whether high spending on AI infrastructure will yield profitable long-term growth.