Nvidia’s (NASDAQ:NVDA) upcoming quarterly results are set to take center stage in the days ahead, as investors gauge whether the chipmaker can continue to justify its staggering valuation and the broader optimism surrounding artificial intelligence.
The semiconductor powerhouse has seen its market value explode by roughly 1,000% since OpenAI launched the ChatGPT chatbot in late 2022, making Nvidia the first public company to exceed a $5 trillion valuation. That meteoric rise has turned its earnings releases into a major sentiment driver for the entire AI sector.
Nvidia’s influence extends even deeper into the market: its shares now make up about 8% of the S&P 500 and nearly 10% of the Nasdaq Composite. This has prompted analysts to warn that the chipmaker’s performance could have far-reaching implications across U.S. equities—not just tech.
The rapid surge in AI-linked valuations, along with a growing number of circular investment arrangements involving Nvidia’s most advanced chips, has fueled nervous debate about whether an AI-driven speculative “bubble” may be forming.
As analysts at Vital Knowledge wrote, “[T]he rising tide of AI skepticism is occurring for (largely) legitimate reasons, and this will remain an overhang for tech, even if the Nvidia results/guidance are great.” They added that “’great Nvidia results’ is ironically part of the problem as the company’s success is becoming mutually exclusive with the health of the overall AI ecosystem.”
Market forecasts remain lofty. According to LSEG figures cited by Reuters, analysts expect Nvidia to report $30.53 billion in fiscal third-quarter net profit alongside $54.8 billion in revenue. For the January quarter, data from FactSet and Jefferies suggests revenue guidance around $61.8 billion and net income near $34.93 billion.
Even with the optimism, challenges remain. BofA Securities analysts Vivek Arya and Duksan Jang noted that “Nvidia near-term is facing the tough task of meeting high (earnings) expectations and high skepticism around AI capital expenditures, likely only resolved when broader market volatility (shutdown, interest-rates) subsides.” They added that they “look for management to provide reassurance around demand and supply and believe muted sentiment […] a contrarian positive heading into the print.”