Chip Giant Nvidia is planning to release its latest revenue report, with the results likely moving across the US stock market.
Over the past two years, chipmakers have become the most valuable company in the world, with market capitalization of over $4 trillion.
When Nvidia announced its earnings on Wednesday, investors can see how the tech giant is carrying amid concerns over President Donald Trump’s trade salvo and whether artificial intelligence is being exaggerated.
Why is Nvidia so important?
Nvidia specializes in creating power AI graphics processing units (GPUs), including the Blackwell B200, which is sold as the world’s most powerful chip.
Ever since AI exploded into the mainstream with the release of OpenAI’s generation AI chatbot ChatGpt in November 2022, chips from the California-based company have become essential for the world’s largest tech companies, including Microsoft, Meta, Amazon and Alphabet.
The company’s portfolio also includes data centers and games.
Nvidia recorded annual revenue of $130.5 billion for last year’s fiscal year ended in late January.
In Nvidia’s revenue report, what is the market looking for?
Analysts will look at a variety of metrics, including the company’s quarterly revenue.
Nvidia’s revenue has been rising at a fierce speed over the past few years thanks to the AI boom and the surge in demand for its chips.
Nvidia has achieved triple-digit revenue growth for the fifth consecutive quarter between mid-2023 and 2024, according to company filings.
Since then, annual revenue growth has been in the Coast at double digits.
In the last quarter, the company reported revenue of $44.1 billion, up 69% from the same period last year.
Such numbers are the vy hopes of any company, but the company’s explosive performance also raised questions about how long its star will last.
Ahead of the upcoming revenue report covering the second quarter of fiscal year 2026, Nvidia said it expects revenues of more than $45 billion or negative 2%.
Analysts forecast revenues of up to $460 billion, or 53% year-on-year.
The revenue report is also expected to show signs of whiplash from the Trump administration’s tariff war.
In April, Trump banned Nvidia from selling H20 chips to China, specifically designed for the Chinese market. At the time, Nvidia said the ban would cost the company $8 billion.
Trump later returned the ban when Nvidia agreed to share 15% of its H20 chip sales with the US government.
Why are you worried about AI being exaggerated?
As Silicon Valley pours billions into AI, some observers, such as Openai CEO Sam Altman, have questioned whether there is a bubble.
“Are we at a stage where the entire investor is overly excited about AI? My opinion is,” Altman told Verge in an interview earlier this month.
He’s not the only one who’s worried.
Analysts resemble the collapse of the “fancy 50” in the 1970s, according to Arun Sai, a senior multi-asset strategist at Pictet Asset Management in the UK.
Nifty Fifty was the group of 50 most valuable companies in the United States, including Xerox and IBM.
Although very profitable, the company was very overvalued in the late 1960s and early 70s.
The value of the clever 50 shares fell by more than 50% when the bubble burst after the stock market crashed in 1973-74.
“They were great companies, but they were trading at the wrong price,” Sai told Al Jazeera.
“This is an old concept that you could be a great company, but if the prices are wrong, it’s not great stock.”
What happened to the magnificent Seven?
Fifty years later, some investors are asking if the “Grand 7” from Nvidia, Alphabet, Amazon, Apple, Meta, Microsoft and Tesla will also be overrated.
The valuations have skyrocketed to trillions of dollars behind Ai Boom, but there is some variation within the group, and Apple and Tesla are not very good these days.
Amazon recently said it expects Microsoft to spend $100 million, while Microsoft is expecting it to spend $85 billion on AI recently.
AI is one of the few bright spots to slow the economy, which has undergone a tumultuous change since Trump took office.
“There’s a decline in growth in other sectors, but in this very small niche, there’s a concentrated pocket of hyper-growth,” Sai said. “This will suddenly become a greater contributor to GDP growth than it is in the normal phase of the cycle.”
While corporate spending on AI is likened to the arms race, tech giants and Nvidia customers will also need to show investors that sooner or later bets on the sector will lead to profits.
The US tech giant is already facing challenges from companies like China’s Deepshake, making global headlines in January when it unveiled a powerful but much cheaper AI model.
So far, innovation appears to have not been converted to higher returns.
A recent survey by the Massachusetts Institute of Technology (MIT) found that 95% of companies report that they have not reported returns on AI investments despite billions of ploughing into the sector.
How much does Nvidia’s latest revenue move through the market?
With Sky-High’s rating, Nvidia alone accounts for almost 8% of the S&P 500. This is a benchmark index of 500 top companies listed on the US stock market.
This means that Nvidia’s revenues can have a significant impact on the overall stock market.
The big move in Nvidia’s stock price has caused an S&P 500 swing of over 1% in the past.
The S&P 500 fell 1.6% after NVIDIA’s earnings fell by more than 8% in February.
