Wall Street is waiting in the wings for Nvidia\u2019s earnings report.<\/p>\n
The Dow was up 130 points, or 0.3%, while the S&P 500 was up 0.2%. The Nasdaq Composite was up 0.1%.<\/p>\n
Nvidia, which is set to report quarterly results after the market\u2019s close, was hovering right around breakeven. Though Wall Street tends to overhype earnings reports, Nvidia may be one of the few that lives up to its billing.<\/p>\n
First of all, Nvidia has a market cap north of $4 trillion. That alone gives it a massive pull on the S&P 500. Nvidia\u2019s earnings and outlook will also provide Wall Street an idea of demand for artificial intelligence, and AI spending has been a major driver for the stock market this year.<\/p>\n
Sevens Report Research\u2019s Tom Essaye called it \u201carguably the most important event of the month.\u201d<\/p>\n
\u201cIf NVDA disappoints, it risks not only sending AI stocks lower, but also the entire market,\u201d he writes.<\/p>\n
He notes Nvidia has added 2.3% of the S&P\u2019s gains this year, while other firms that have benefitted from AI hype like Microsoft, Meta Platforms, Broadcom, and Palantir account for another 3.2%. Essaye notes Meta, Amazon, Meta, and Alphabet are spending hundreds of billion dollars to build AI infrastructure.<\/p>\n
\u201cEssentially, this AI infrastructure buildout is acting like a mini-government stimulus program!\u201d Essaye adds. \u201cAnd it\u2019s not just benefiting the chipmakers. It\u2019s also benefiting utilities (data centers need power), networking, construction, cooling, transportation, etc.\u201d<\/p>\n
A negative report could flow through the broader market if it portends a slowdown in spending. It would also put into question analyst expectations for S&P 500 earnings of $265 a share in 2025 and $299 in 2026.<\/p>\n
\u201cMarkets are pricing substantial AI earnings growth that will drive S&P 500 earnings sharply higher,\u201d Essaye writes. \u201cIf AI earnings growth disappoints, this market has a large valuation problem. I say that because 2026 earnings will not stay at $299. They will drop sharply, perhaps to $275 or lower.\u201d<\/p>\n
That doesn\u2019t mean Nvidia\u2019s earnings report will disappoint. In fact, Essaye says they probably won\u2019t miss expectations. But the market\u2019s reliance on these trends does set up each report to be a blockbuster event in case AI enthusiasm wanes.<\/p>\n
\u201cThat could send the S&P 500 lower regardless of stagflation risks, the Fed, or anything else macro-oriented,\u201d Essaye concludes.<\/p>\n","protected":false},"excerpt":{"rendered":"Wall Street is waiting in the wings for Nvidia\u2019s earnings report. The Dow was up 130 points, or…\n","protected":false},"author":2,"featured_media":1047,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[45,49,48,100],"class_list":["post-101265","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-ca","tag-canada","tag-markets"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/101265","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=101265"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/101265\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/1047"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=101265"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=101265"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=101265"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}