NVDA Earnings Preview: Can the AI Leader Steady the Nasdaq? Outlook for U.S. Tech Stocks

NVDA Earnings Preview: Can the AI Leader Steady the Nasdaq?

With the market's attention once again focused on AI computing leader Nvidia (NVDA), its upcoming quarterly earnings report is seen as a crucial test for the U.S. tech sector. After the Nasdaq and S&P 500 tech stocks experienced volatility since the start of the year, this report not only concerns Nvidia's own stock performance but could also determine the short-term direction of the entire AI supply chain.

Earnings Expectations: Growth Test Under a High Base

According to consensus estimates from multiple financial media analysts, Nvidia's revenue and profit for this quarter are expected to continue year-over-year growth, though the pace may slow compared to previous quarters. The market is closely watching its data center business—especially the shipment pace of the H100 and subsequent Blackwell architecture chips—to see if it can continue to exceed expectations. Some institutions point out that as competitors like AMD and tech giants developing their own chips (e.g., Google, Amazon) accelerate their efforts, Nvidia's monopoly in the AI training market is facing marginal challenges.

Meanwhile, Nvidia's gross margin trajectory is also a focal point. Due to rising advanced packaging costs and changes in product mix, the market worries that its gross margin may dip slightly from historical highs. If the gross margin guidance in the earnings report falls short of expectations, it could trigger short-term profit-taking pressure.

Impact on the Nasdaq and S&P 500

As one of the largest components in the S&P 500 index, Nvidia's stock price movements significantly influence the index. According to public data, Nvidia contributed about one-third of the Nasdaq 100's gains in 2024. A strong earnings report could boost AI chip, server, cloud computing, and other related sectors, providing support for the Nasdaq. Conversely, disappointing results could trigger a chain reaction of tech stock pullbacks, dragging down the index's short-term performance.

From a capital flow perspective, some actively managed funds have recently started reducing their tech holdings and shifting to defensive sectors. However, passive funds remain heavily invested, meaning Nvidia's earnings could trigger significant portfolio rebalancing. Analysts believe that if the stock experiences sharp volatility after the report, it could affect the overall valuation of the S&P 500 tech sector.

Institutional Divergence: What's Next for AI Computing Stocks?

Institutional investors are clearly divided on the outlook for AI computing stocks. Optimists argue that AI applications are shifting from training to inference phases, and the demand for computing power from both enterprises and consumers is far from saturated. According to a Goldman Sachs report, global AI infrastructure investment is expected to maintain double-digit growth in 2025, and Nvidia, as a key supplier, will continue to benefit. Additionally, the launch of the Blackwell architecture could kick off a new product cycle, strengthening its technological moat.

Cautious voices, however, point out that valuations of AI computing stocks have already priced in years of future growth. For example, Nvidia's price-to-earnings (P/E) ratio exceeded 50 times in 2024, well above its historical average. Some hedge funds have built short positions ahead of the earnings season, betting on a price correction. Moreover, geopolitical risks (such as stricter U.S. chip export controls to China) could dampen some market demand, while uncertainty around AI investment returns has led some long-term investors to stay on the sidelines.

Market Sentiment and Key Variables

From the options market, Nvidia's implied volatility on earnings day is at historically high levels, indicating strong expectations for significant price swings. Some traders are using straddle strategies to bet on a daily move of more than 8%. Beyond the earnings themselves, management's guidance on next-quarter revenue, AI chip capacity expansion plans, and comments on customer capital expenditure trends will be key variables influencing market sentiment.

For the Nasdaq index, the success or failure of Nvidia's earnings could determine its short-term direction. If earnings beat expectations, tech stocks may regain upward momentum; if they fall short, the index could retest key support levels. Investors should closely monitor market reactions and capital flow changes after the report.

Risk Warning

The above content is for reference only and does not constitute investment advice. Stock markets carry risks; invest with caution. The analysis in this article is based on public information and market expectations, and actual results may differ significantly due to macroeconomic factors, policy changes, and company operations.