Stay informed with free updates
Simply sign up to the US equities myFT Digest — delivered directly to your inbox.
Nvidia’s earnings are starting to rival key economic data in terms of market significance, according to analysts, in a sign of the US chipmaking giant’s outsized impact on equity markets.
Markets were cautiously higher on Wednesday as investors awaited second-quarter earnings from the chipmaker due after US markets close. Futures tracking the S&P 500 and the Nasdaq Composite were flat in pre-market trading while the Stoxx Europe 600 was up 0.5 per cent.
Analysts said results from the US’s second-largest company by market value had the potential for market volatility on a par with critical monthly economic indicators such as US jobs or inflation data.
The company’s share price has surged 160 per cent this year, propelled by a boom in spending on artificial intelligence. It now accounts for about 6 per cent of the S&P 500 and more than a quarter of the benchmark’s 18 per cent gains this year.
Nvidia has become “one of the most important events on the macro calendar” with recent results leading to market reactions “that rival the sort of moves taking place after a surprise US jobs report or consumer prices index release,” said analysts at Deutsche Bank.
The bank noted that the S&P rose 2.1 per cent the day after Nvidia’s results in February, its second-best daily performance of the year. The S&P 500 closed marginally higher on Tuesday, close to its record high.
One asset manager said that he could not recall a set of corporate earnings that had been more “keenly awaited”. “It’s hard to imagine the share price not reacting strongly later this evening,” he said.
“We detect a picture of retail investor tech bullishness, while hedge funds and active equity mutual funds appear more cautious on US tech,” said JPMorgan analyst Nikolaos Panigirtzoglou.
Global markets were jolted at the start of the month after weaker-than-expected US jobs data triggered sharp falls for US stock markets.
Morningstar equity strategist Michael Field said that Nvidia’s earnings could still send shockwaves through the market. “We’re in a precarious period. We had the sell-off in August and have pretty much recovered since . . . [but] Vix is still elevated,” he said.
The company’s results will have implications for other tech stocks given that Nvidia has become the bellwether of an AI trend that has pushed up the market capitalisation of US giants including Apple and Microsoft.
Yet the US chipmaker is facing questions around the extent of reported delays to its next-generation Blackwell chips, while investors are also cautious customers could slow their spending on AI-related chips.
Analysts expect Nvidia to report $28.7bn in revenue for the quarter, which would represent a doubling in performance relative to the previous year.
Read the full article here