What’s going on here?

Nvidia’s upcoming earnings report on August 28 could shake the US share market, given the company’s 150% stock rise this year and its significant role in the S&P 500’s 17% gain in 2024.

What does this mean?

Nvidia’s AI chips are top-notch, making the company the market leader. A portfolio manager at Allspring Global Investments even called Nvidia a “stock of the zeitgeist” and compared the earnings release to the “Super Bowl.” Traders are expecting a possible 10.3% swing in Nvidia stock after the earnings release, according to ORATS data, highlighting the risks. Recently, other tech giants such as Microsoft, Tesla, and Alphabet have seen share prices drop after their July results, showing the market’s high standards. Nvidia’s current valuation, which stands at 37 times forward earnings, versus a 20-year average of 29, has investors all focused on future demand forecasts. Nvidia’s forecast for 2025 and 2026 will be crucial, especially given the Federal Reserve’s cautious stance toward interest and upcoming reports on the US labor market.

Why should I care?

For markets: Navigating the waters of uncertainty.

The S&P 500 is nearing its all-time high, but high valuations are setting a high bar for market performance. Historically, the index has fallen an average of 0.78 percent in September since World War II, according to CFRA data. Investors know that given current valuations, Nvidia’s results could either maintain the market’s uptrend or trigger a downturn.

The overall picture: Global economic changes are on the horizon.

As Federal Reserve Chairman Jerome Powell resists a further slowdown in the labor market and a close presidential race looms, Volatility seems inevitable. Nvidia’s performance and future outlook will be crucial, not only for the technology sector but also for the overall market sentiment amid these economic uncertainties. Investors are closely watching whether the AI ​​investment wave will further boost market confidence.