Nvidia must ‘step up to the plate’ after $1.5 trillion rally
The world’s most valuable listed company is expected to report another surge in sales and profits after the US market closes, with Wall Street forecasting quarterly revenue approaching $79bn (£58.9bn).
But investors are increasingly questioning how long Nvidia can sustain growth at its current pace after the stock added more than $1.5tn in market value since April.
The company, led by leather jacket-clad Jensen Huang, now sits at the centre of global equity markets, with its chips powering the vast majority of the AI systems being built by Microsoft, Amazon, Google and Meta.
Chris Beauchamp, chief market analyst at IG, said Nvidia had become unlike almost any company investors had seen before.
“Most investment textbooks are unlikely to cover how to analyse a stock which is bigger than some countries’ entire stock markets, dominates a key global industry and has rallied nearly 40 per cent in a month,” he said.
“Having beaten in its eight preceding quarters, the world’s most valuable company has to step up to the plate once again.”
The results come at a fragile moment for markets, where rising US bond yields, renewed inflation fears and concerns over energy disruption linked to tensions in the Middle East have sparked volatility across tech stocks in recent sessions.
The Nasdaq has pulled back in recent days despite Nvidia shares remaining close to record highs.
Proof AI stretched beyond Big Tech
Investors will be looking for signs that demand for Nvidia’s chips is broadening beyond a handful of hyperscale behemoths, while also watching whether the company can maintain margins close to 75 per cent despite rising costs across the semiconductor supply chain.
Alvin Nguyen, senior analyst at Forrester, said Nvidia needed another “beat and raise” quarter to maintain confidence in the AI growth story.
“At a roughly $5tn valuation, the question is no longer whether growth is strong – it’s whether growth can be sustained at this level,” he said.
Nvidia’s dominance has also increasingly stretched beyond semiconductors.
The company has committed tens of billions of dollars to investments and partnerships across the wider AI economy, backing various tech firms in a push to tighten its grip on the sector.
That expansion has helped fuel comparisons between Huang and Apple co-founder Steve Jobs, while simultaneously increasing pressure on Nvidia to continue delivering near-flawless results.
Kathleen Brooks, research director at XTB, said the market was now expecting “another monster report”.
“The next leg of the AI trade, and the US stock market rally, could depend on tonight’s results,” she said.