Tech stocks have been leading the charge in the market, propelling a surprising rally in May that has seen all three major indices reach record highs.
The upcoming earnings report from Nvidia(NASDAQ:NVDA), scheduled for Wednesday, May 22, will be closely watched as it represents the final update from the tech sector’s Magnificent 7 megacap stocks for the first quarter.
Nvidia, which has been outperforming the Nasdaq with an 11.4% gain over the past month, is expected to provide insights into the market’s trajectory heading into the Federal Reserve’s next policy meeting in June.
As a leading producer of AI chips, Nvidia has seen significant growth, adding over $1 trillion in market value this year. The company’s forecast of doubling revenue from its H100 processors ignited interest in the sector last year.
With the launch of its newer and more advanced Blackwell series of AI-focused GPUs, Nvidia has solidified its position in the global AI supply chain, catering to major players like Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG), Meta Platforms (NASDAQ:META), and Amazon (NASDAQ:AMZN).
CEO Jensen Huang envisions substantial growth in the data-center market, estimating it at $250 billion annually, in addition to the $1 trillion installed base. Nvidia’s connection to the tech market’s zeitgeist will be crucial as investors look for guidance amidst the rally and capital spending plans by major customers.
Analysts anticipate strong results from Nvidia, with earnings expected to rise over fivefold from a year earlier to $5.58 a share. Revenue is projected to triple to around $24.6 billion, signaling continued growth momentum for the company.
Despite concerns about economic slowdown and rising unemployment, the market remains optimistic, driven by robust earnings growth and a resilient economy. The dovish stance of the Federal Reserve and expectations of lower rates further support the bullish sentiment.
Overall, Nvidia’s earnings report will be a key factor shaping market sentiment and momentum in the tech sector moving forward.
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