Nvidia Earnings Eve: Nasdaq Eyes Record High, Can the AI Rally Persist?

As global investors focus on the upcoming quarterly earnings report from AI chip giant Nvidia, sentiment in the US stock market is once again ignited. Driven by the ongoing artificial intelligence boom, the Nasdaq Composite is poised to challenge its all-time high, while the three major indices show resilience led by tech stocks. Market consensus holds that Nvidia's performance not only affects its own share price but is also seen as a barometer for the entire AI supply chain and the technology sector.

Earnings Expectations Fuel Market Enthusiasm

As the undisputed leader in AI chips, Nvidia's earnings have historically had a significant impact on global tech stock trends. Ahead of this earnings release, market expectations are broadly optimistic. According to reports from multiple market analysis firms, investors anticipate Nvidia will continue to benefit from strong demand for AI accelerators in data centers, with revenue and profits expected to maintain rapid growth. This optimism is directly reflected in index futures and pre-market trading of tech stocks, with Nasdaq futures rising and pushing the spot index closer to its previous record high.

Meanwhile, other major tech stocks such as Microsoft, Alphabet (Google's parent company), and Amazon are also buoyed, as these companies are investing heavily in AI infrastructure and model training, forming a close supply chain synergy with Nvidia. The market believes that as long as Nvidia's guidance does not fall significantly short of expectations, the bullish logic for the tech sector remains intact.

Mixed but Generally Strong Performance Across Major Indices

Although the Nasdaq is the standout performer, the Dow Jones Industrial Average and the S&P 500 are also influenced by the positive sentiment. The Dow remains steady, supported by financial and industrial stocks, while the S&P 500 gains, lifted by heavyweight tech names. According to recent data from the US Labor Department, inflationary pressures have eased, providing more room for the Federal Reserve to cut interest rates in the future, further boosting risk appetite. However, some analysts caution that if Nvidia's earnings fail to meet extremely high expectations, profit-taking could trigger a short-term pullback in the indices.

Significant Ripple Effects Across the AI Supply Chain

The impact of Nvidia's earnings extends far beyond its own stock price. From upstream chip manufacturing equipment suppliers to downstream cloud service providers, the entire AI supply chain is closely watching this report card. According to reports, several semiconductor equipment companies have recently raised their full-year guidance, partly based on expectations of expanded capacity by Nvidia and its competitors. Additionally, AI application companies, such as software service providers and autonomous driving firms, are gaining market attention due to expectations of lower computing costs.

Notably, this ripple effect is also evident in global markets. Tech stocks in Asia and Europe generally rose ahead of Nvidia's earnings, reflecting unanimous global investor optimism about the AI industry's prospects. However, institutions like Goldman Sachs have noted in recent reports that valuations of AI-related stocks are at historically high levels, and any sign of underperformance could trigger volatility.

Market Sentiment and Risks Coexist

From a technical perspective, the Nasdaq has been trading above key moving averages for several consecutive sessions, with the Relative Strength Index approaching overbought territory, indicating strong short-term upward momentum but also suggesting accumulating correction risks. In terms of fund flows, according to exchange public data, tech sector ETFs saw significant net inflows over the past week, indicating that institutional investors are still adding to AI-themed positions.

However, not all voices are confident. Some strategists warn that market expectations for Nvidia have become too concentrated, and if revenue or gross margin data slightly misses consensus, it could trigger a chain reaction. Additionally, geopolitical tensions and potential changes in export control policies add uncertainty to the chip industry.

Overall, Nvidia's earnings report has become the core catalyst for the current US stock market. Regardless of the outcome, the resulting volatility will provide investors with an opportunity to reassess the value of AI assets. Near record highs, caution and optimism coexist, and this earnings report may determine the direction of tech stocks in the coming weeks.