Nvidia earnings- AI infrastructure trade highly depends on Nvidia’s upcoming earnings

Nvidia earnings– Nvidia’s (NVDA) stock has been on a remarkable run in 2023, gaining an impressive 159% year to date and over 60% in the past six months. This sharp rise stands in stark contrast to some of its competitors, such as Intel (INTC), whose stock has plummeted by over 60% in the same period. As Nvidia prepares to release its earnings report after the bell on Wednesday, investors and analysts are keenly watching to see if the company can maintain its momentum and continue to lead the AI revolution.

Nvidia’s Earnings: A Critical Moment for AI Investors

The upcoming earnings report is not just crucial for Nvidia; it could set the tone for the entire AI sector. Tech investor Paul Meeks recently told Yahoo Finance, Nvidia’s report and guidance will be absolutely key to the AI infrastructure trade. This sentiment is echoed by many in the industry, as Nvidia’s performance is often seen as a bellwether for the broader AI market.

Over the past few months, tech investors have experienced a roller-coaster ride, with shares of AI giants like Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL) declining. Amazon and Microsoft have both seen their stocks drop by more than 3% in the last three months, while Alphabet has fallen over 6%. Meanwhile, second-tier AI players such as AMD (AMD) and Marvell Technology (MRVL) have also struggled, with AMD down more than 16% since mid-July and Marvell off nearly 6% in the same period.

Can Nvidia Ignite the AI Sector Again?

Despite these challenges, there is optimism that strong results from Nvidia could reignite interest in the AI sector. Dan Ives of Wedbush is particularly bullish on Nvidia’s prospects, predicting a “shock and awe” quarter for the chipmaker. Ives believes that continued strong demand for Nvidia’s GPUs will have a significant multiplier effect across the tech sector, estimating that for every dollar spent on a Nvidia chip, there is an $8 to $10 impact on the broader industry.

“Nvidia is the heart and lungs of this bullish tech trade as the AI Revolution takes hold,” Ives said. His confidence in Nvidia’s ability to drive the market is shared by other analysts, who see the company’s performance as a key indicator for the future of AI and Big Tech.

The Ripple Effect: Nvidia’s Impact on Big Tech

Bernstein analyst Mark Shmulik, who covers many of Nvidia’s largest customers including Meta, Amazon, and Google, also believes that Nvidia’s earnings will be a critical driver of Big Tech’s next move. Nvidia is a bellwether of the Magnificent Seven and AI trade, Shmulik explained. If there is any softness, maybe rotation out of the Mag 7 picks up a little bit of steam, but listening to other tech earnings, core fundamentals keep delivering.

Shmulik’s comments underscore the importance of Nvidia’s earnings report not just for the company itself, but for the entire tech sector. As one of the leading players in the AI space, Nvidia’s performance is closely watched by investors and analysts alike, and any signs of weakness could have a ripple effect across the industry.

Nvidia’s Unprecedented Growth: Can It Continue?

Nvidia’s stock performance over the past year has been nothing short of extraordinary. Shares are up 180% year-to-date and nearly 2,900% over the past five years. This incredible growth has set a high bar for the company’s earnings this quarter, and investors are eager to see if Nvidia can continue to deliver the strong results that have propelled its stock to new heights.

However, with great expectations comes the risk of disappointment. As Nvidia’s stock has soared, so too have the expectations of investors, and any signs of slowing growth could lead to a pullback in the stock. Nevertheless, many analysts remain optimistic about Nvidia’s prospects, pointing to the continued demand for its GPUs and its leadership position in the AI market as reasons to believe that the company can continue its winning streak.