Tech Earnings Season Arrives: NVDA Leads, Can US Stocks Extend Rally? In-Depth Report

Earnings Season Prelude: The 'Midterm Exam' for Tech Giants

As corporate earnings for the first quarter of 2025 begin to roll in, the US stock market once again turns its attention to the performance of tech giants. Companies like Nvidia (NVDA), Apple (AAPL), and Tesla (TSLA) will release quarterly results over the next two weeks, which will not only test their own profitability but also serve as a key variable for the short-term direction of the Nasdaq and S&P 500 indices. Market expectations are that this earnings season will be a watershed moment for testing the 'AI narrative' and 'valuation rationality.'

Currently, the Nasdaq index is near historic highs, while the S&P 500's forward P/E ratio has exceeded 20 times, above its ten-year average. Investors are both hoping that tech giants' revenue growth can continue to support high valuations and worried that slowing profit growth could trigger a correction. According to a consensus of FactSet analysts, the overall profit growth expectation for the tech sector has been revised down from double digits to single digits, with market sentiment shifting from optimism to caution.

Nvidia: Can the AI Narrative Support High Valuations?

As the undisputed leader in AI chips, Nvidia's earnings have always been seen as a 'barometer' for the AI industry chain. The market expects its data center business to continue strong growth, but the pace may slow compared to previous quarters. According to industry media reports, the capital expenditure plans of major cloud service providers (such as Microsoft, Amazon, and Google) remain expansionary, but some customers have begun to optimize their procurement pace to avoid overstocking. Whether Nvidia's upcoming Blackwell series of new products can deliver better-than-expected gross margin performance will be a core factor determining the short-term direction of its stock price.

From a valuation perspective, Nvidia's current P/E ratio exceeds 30 times. While lower than its peak last year, it remains at a high level among tech stocks. If the earnings report shows slowing revenue growth without a corresponding increase in profits, it could trigger a market repricing of the 'AI bubble.' Conversely, if management raises its full-year guidance, it could reignite bullish sentiment. As one Wall Street analyst noted: 'Nvidia needs to prove that its moat is not only deep but also capable of continuous expansion.'

Apple: Services Revenue and AI Strategy Take Center Stage

The focus of Apple's earnings report is relatively more diverse. On the hardware side, the market performance of the iPhone 16 series has met expectations, but sales in Greater China still face competitive pressure from local brands like Huawei. According to IDC data, Apple's market share in China's smartphone market has slightly declined, which may keep overall hardware business growth in the low single digits. The market is more focused on whether the services business—including the App Store, iCloud, and Apple Music—can sustain double-digit growth and whether the user penetration rate of Apple Intelligence features has increased.

It is worth noting that Apple has recently increased its AI-related investments, including collaborations with multiple model providers and acquisitions of startups. During the earnings call, management may reveal more plans for monetizing AI services. If services revenue growth exceeds expectations or if AI features drive a hardware upgrade cycle, Apple's stock price could find support. Conversely, continued weakness in the Chinese market could become a drag.

Tesla: The Critical Test of Deliveries and Profit Margins

The challenges facing Tesla are more pronounced. Although Full Self-Driving (FSD) and the robotaxi plan have attracted significant attention, the growth rate of core automotive deliveries has clearly slowed. According to data previously released by Tesla, deliveries in the first quarter of 2025 declined quarter-over-quarter, falling short of some analysts' expectations. At the same time, margin compression per vehicle due to price wars continues, with automotive gross margins (excluding regulatory credits) falling to historic lows. The market fears that if deliveries do not recover in the second quarter, Tesla's earnings expectations could be further downgraded.

However, Tesla's stock price already implies a large number of future expectations, including the commercialization of FSD, the humanoid robot Optimus, and a boom in its energy storage business. Details on the progress of these new ventures in the earnings report will be crucial. If Elon Musk can provide a specific timeline for commercial deployment, or if energy storage growth exceeds expectations, the stock price could see a rebound. Overall, Tesla is walking a tightrope between 'maintaining sales volume and protecting profits,' and the earnings report's impact on its short-term stock price will be the most dramatic.

Macro Environment: Rate Cut Expectations and Liquidity Dynamics

The earnings performance of tech giants cannot be separated from the macro backdrop. The Federal Reserve kept interest rates unchanged at its most recent meeting, but the dot plot indicates there could still be two rate cuts within the year. This provides the market with expectations of loose liquidity, but it also faces disruptions from repeated inflation data. If upcoming CPI or PPI data comes in higher than expected, the timing of rate cuts could be further delayed, which would be unfavorable for high-valuation tech stocks. Conversely, if economic data weakens and rate cut expectations heat up, it could boost the valuation recovery of the tech sector.

Additionally, the 10-year U.S. Treasury yield is currently around 4.3%, down from the beginning of the year but still at a high level. Tech stocks (especially growth companies) are highly sensitive to interest rates. If yields continue to decline, it would directly enhance the attractiveness of the Nasdaq. The U.S. dollar index is currently relatively stable, and risk appetite has not seen a clear reversal. However, there is some market concern about a new round of tariff policies that the Trump administration might introduce. If trade frictions escalate, it would bring uncertainty to tech companies with globally dependent supply chains.

Nasdaq and S&P 500: Are Valuations Overstretched?

From a historical perspective, the current P/E ratio of the Nasdaq index is around 35 times, placing it above the 90th percentile historically. The S&P 500's forward P/E ratio exceeds 20 times, also above its historical average. The main logic supporting high valuations is the expectation of a productivity revolution driven by AI, as well as the stable cash flows and share buyback capabilities of tech giants. However, once profit growth fails to keep pace with valuation expansion, the market faces the risk of mean reversion.

Another viewpoint argues that even if valuations are high, the stock market can remain elevated as long as earnings growth remains strong. Taking Nvidia and Apple as examples, their long-term compound growth rates are still significantly better than other industries. Moreover, institutional investors' allocation to tech stocks remains high, making a large-scale sell-off unlikely. Therefore, in the short term, this earnings season will be a key battleground for bulls and bears. If most of the giants' results meet or exceed expectations, the indices could break to new highs. If there are significant misses, the correction could be 5%-10%.

Conclusion: Short-Term Volatility Inevitable, Long-Term Logic Unchanged

In summary, this earnings season is both a stress test for the fundamentals of tech companies and a recalibration of market sentiment. The results of Nvidia, Apple, and Tesla will determine whether the Nasdaq and S&P 500 can sustain their rally since the start of the year. Given the coexistence of high valuations and macro uncertainty, short-term volatility is inevitable. However, in the long run, core drivers such as AI technological iteration, enterprise digitalization needs, and the new energy transition have not disappeared, and the moats of tech giants remain deep. Investors should focus on the actual data and management guidance in the earnings reports, rather than blindly following market sentiment.

Risk Warning

The above content is for reference only and does not constitute any investment advice. The companies, indices, and data mentioned in the text are from public information. Markets involve risks, and investment should be made with caution. Past performance does not guarantee future results. Investors should make independent judgments based on their own risk tolerance.