AI Earnings and PCE Data: What to Expect in the Week Ahead

As the week unfolds, investors are eagerly awaiting earnings reports from AI behemoths like Nvidia (NVDA) and Salesforce (CRM), as well as the latest Personal Consumption Expenditures (PCE) data. These events could significantly impact the broader AI sector and investor sentiment. Let's delve into what to expect from these key developments.



1. Nvidia (NVDA) Earnings: NVDA is set to report its fiscal Q2 2025 earnings on August 28, 2024. Investors should focus on the following aspects:
* Data Center Segment Performance: NVDA's data center segment is a critical driver of its overall growth. In Q2 2025, the segment is expected to generate $25.0 billion in revenues, up from $8.8 billion in January 2023. The pace of analysts' upward revisions to the data center segment and the outlook for the rest of FY 2025 will be important indicators of NVDA's future growth prospects.
* Gross Profit for the Data Center Segment: The consensus gross profit for the data center segment for FY 2025 has decreased by $3 billion since last quarter, reflecting lower expectations for Q4 2025. Investors should monitor this trend and assess the potential impact on NVDA's overall profitability.
* Blackwell Outlook: The performance of NVDA's Blackwell segment will likely be important. Investors should pay attention to any guidance or updates regarding this segment's performance and future prospects.
2. Salesforce (CRM) Earnings: CRM is set to report its earnings on August 29, 2024. Investors should focus on the following aspects:
* AI Integration and Adoption: CRM has been investing heavily in AI and integrating it into its Customer Relationship Management (CRM) platform. Investors should look for updates on the adoption and success of these AI-driven features, as well as any new AI-related initiatives or partnerships.
* Revenue Growth and Guidance: CRM's revenue growth and guidance for the upcoming quarters will be crucial indicators of the company's overall health and growth prospects. Investors should pay close attention to any updates or revisions to CRM's revenue guidance.
* Customer Acquisition and Retention: CRM's ability to acquire and retain customers is a key metric for the company's success. Investors should look for updates on customer acquisition costs, churn rates, and any other relevant metrics that indicate CRM's ability to maintain and grow its customer base.
3. PCE Data: The PCE data, scheduled for release on February 28, 2025, can impact investor sentiment and risk appetite, particularly for AI-related stocks. If the PCE data comes in hotter than expected, it could lead investors to anticipate higher interest rates, which could negatively impact AI-related stocks due to their typically higher valuations and growth expectations. Conversely, a cooler-than-expected PCE reading could ease inflation concerns and lead to a more accommodative monetary policy, potentially boosting investor sentiment and risk appetite for AI stocks.



In conclusion, the earnings reports from NVDA and CRM, along with the PCE data, could significantly influence the broader AI sector's performance in the coming weeks. Investors should closely monitor these events and analyze the specific aspects of their earnings reports to make informed decisions about their portfolios. By staying informed and adapting to the latest developments, investors can capitalize on the growing AI market and maintain a competitive edge.