Investors are cautious as Nvidia’s upcoming earnings begin to rival US data for impact

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Nvidia’s earnings are starting to rival key economic data in terms of market importance, analysts said, in a sign of the US chip giant’s huge impact on stock markets.

Markets rose cautiously on Wednesday as investors awaited second-quarter earnings from the chipmaker, due after the US market closed. Futures tracking the S&P 500 and Nasdaq Composite were flat in premarket trading, while the Stoxx Europe 600 rose 0.5 percent.

Analysts said the results from the second-largest US company by market value have the potential for market volatility on par with critical monthly economic indicators such as US jobs or inflation data.

The company’s share price has risen 160% this year, driven by an explosion in artificial intelligence spending. It now accounts for about 6% of the S&P 500 and more than a quarter of the benchmark’s 18% gain this year.

Nvidia has become “one of the most important events on the macro calendar”, with recent results leading to market reactions “rivaling the kind of moves that occur after a surprise US jobs report or the release of the consumption,” said analysts at Deutsche Bank.

The bank noted that the S&P rose 2.1 percent the day after Nvidia’s February results, its second-best daily performance of the year. The S&P 500 ended Tuesday marginally higher, near a record high.

One asset manager said he could not recall a set of corporate earnings that were more “hotly anticipated”. “It’s hard to imagine that the share price won’t react strongly tonight,” he said.

“We are seeing a picture of technology optimism among retail investors, while hedge funds and active equity mutual funds appear more cautious about US technology,” said JPMorgan analyst Nikolaos Panigirtzoglou.

Global markets were rattled at the start of the month after weaker-than-expected US jobs data triggered steep declines for US stock markets.

Morningstar equity strategist Michael Field said Nvidia’s earnings could still send shock waves through the market. “We are in a precarious period. We had sales in August and have recovered quite a bit since then. . . (but) Vix is ​​still high,” he said.

The company’s results will have implications for other tech stocks, given that Nvidia has become the flagship of an AI trend that has pushed up the market capitalization of US giants including Apple and Microsoft.

However, the US chipmaker is facing questions about the extent of reported delays to Blackwell’s next-generation chips, while investors are also wary customers could slow spending on AI-related chips.

Analysts expect Nvidia to report revenue of $28.7 billion for the quarter, which would double year-over-year performance.