Nvidia’s (NASDAQ:NVDA) quarterly report, due after today’s market close, could have significant implications not only for the tech sector but for the broader equity market, according to Sevens Report Research.
“Arguably the most important event of the month comes after the close today via NVDA earnings, as that stock has led the entire AI-enthusiasm rally that’s powered stocks higher not just in 2025 but for the past two-and-a-half years,” Sevens said.
The research note pointed out that Nvidia alone has contributed 2.3 percentage points to the S&P 500’s 10% year-to-date gain. When including other major AI-linked companies like Microsoft, Meta, Broadcom, and Palantir, these five names together have driven about half of the index’s total gains.
“So, if they decline, the S&P 500 will decline,” Sevens warned.
Beyond share price movements, Nvidia’s results are closely watched because of their impact on capital spending and AI-related earnings expectations. Sevens noted that the so-called “Mag Seven” companies are expected to invest more than $500 billion in AI infrastructure across 2024 and 2025.
“Essentially, this AI infrastructure buildout is acting like a mini-government stimulus program,” the firm said, highlighting that the benefits extend beyond chipmakers to sectors like utilities, networking, construction, and transportation.
On the earnings front, Sevens observed that S&P 500 profits are projected to rise from around $265 in 2025 to $299 in 2026, driven largely by AI growth.
“If AI earnings growth disappoints, this market has a large valuation problem,” the note cautioned, adding that a pullback could push 2026 earnings down to $275, implying an “unsustainable” 23.5 times multiple.
While Sevens does not anticipate a miss from Nvidia, it emphasized that “AI enthusiasm” is central to market momentum and valuations.
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