Stock Market Darling to Report Quarterly Sales on Wednesday

On Wednesday, Nvidia (NVDA) will be releasing its second fiscal quarterly report for the year, and expectations are high for the AI chip manufacturer.

AI stocks have done very well in recent weeks on Wall Street, but how they do over the next week will depend largely on how Nvidia fares after its earnings report comes out.

The anticipated score is that the company will report double the earnings this quarter compared to last quarter. Those are incredibly high numbers, but then Nvidia has been breaking its own records for a while now, impressing even during times when the market was in a downturn.

The only risk to the company posting a stellar earnings report is the continuing production problems. These have persisted during a period when AI chips are in incredibly high demand.

Nivida also has a problem of trying to live up to the sky high expectations that have been thrust upon it. The chip maker has seen its stock shoot up by about 150% already in 2024, and it has almost single handedly helped the S&P 500 perform very well for much of the year.

The Downside

Nvidia stock is down right now, by 2% as we approach the earnings report scheduled for Wednesday. The stock still has an opportunity to turn around, but we could be seeing loss of faith in the company from the investing public. Has Nvidia climbed too high too quickly? Are investors worried that the AI bubble is going to burst?

It can be dangerous to pin all of someone’s investing power on a single stock, especially in a volatile market. We are just now seeing an improvement in the US inflation rate, and the stock market is inherently risky as recession fears are still a topic of conversation.

With a single bad report, the stock market could plummet, and then the consecutive weeks of gains can be brought to a close. Nvidia has more than just its own future resting on its shoulders. The stock market is looking to it as the darling stock, and if it performs well, that will boost AI stocks, tech stocks, and more.