NVIDIA Earnings Loom: A Make-or-Break Moment for AI and U.S. Markets

As NVIDIA prepares to release its highly anticipated fourth-quarter earnings report for the fiscal year 2024, investors and tech enthusiasts are paying close attention to the global leader in graphics processors and pioneer in the artificial intelligence (AI) domain. Expectations for the quarter ending February 26 indicate revenue of $410 billion, slightly below the market consensus of $420 billion, with a significant slowdown in revenue growth to 73%.

NVIDIA's earnings report not only reflects its own performance but also serves as a barometer for the health of the entire AI industry. Analysts caution that should NVIDIA's performance or guidance fail to meet expectations, it could lead to widespread turbulence in the AI sector and even impact the stability of the U.S. stock market.

On the eve of NVIDIA's earnings announcement, there is already a sense of unease in the U.S. stock market. The VIX index, which measures market volatility, spiked on Friday, along with sharp declines across the major indices. Notably, hedge fund titan Steve Cohen issued a warning that U.S. equities could experience a pullback, with economic growth possibly slowing to 1.5%.

The focus of the earnings report will be on AI data center revenue growth, product transition within inventory, and perspectives on AI application deployment. Despite robust global demand for AI chips, NVIDIA's outlook is complicated by intensifying competition. Additionally, delays in the delivery of its Blackwell series chips have the potential to affect overall revenue and gross margin.

According to Morgan Stanley, should NVIDIA's revenue exceed expectations, its stock price may rise by 3% to 15%; conversely, if performance falls short, the stock could drop by 5% to 10%. It's important to note that since the advent of ChatGPT, NVIDIA has been a key driver of the S&P 500 index, and its earnings report will directly influence the market performance of related chip giants like TSMC and SK Hynix.

Overall, NVIDIA's earnings report is a critical indicator for the AI industry, with its future performance having significant implications for the technology market. This anticipation is coupled with high expectations and concerns among investors regarding NVIDIA's trajectory. For automakers and potential buyers alike, advancements in AI technology are keenly observed, as they will directly impact future innovations in electric vehicles, autonomous driving, and smart car features.

In summary, NVIDIA's imminent earnings release will not only reveal its market standings but will also prompt new reflections and expectations on technological advancements within the automotive industry. The market's response remains to be seen.