Nvidia Earnings Give Investors a Barometer for State of AI Trade

(Bloomberg) -- Wall Street is eagerly anticipating Nvidia Corp.'s ( NVDA ) earnings on Wednesday afternoon, not so much for what the numbers will say about the chip giant, but for what they mean to artificial intelligence investors and the market itself.

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"Nvidia is the best barometer for AI spending," said Rob Conzo, chief executive officer of the Wealth Alliance, which owns Nvidia shares in several portfolios. "It will help determine if hyperscalers are still accelerating, from an infrastructure perspective, or if they're becoming more disciplined."

The company's shares have been on a wild ride this year, sinking through the winter, then soaring through the spring, and bouncing around all summer. They're coming off a seven-day losing streak, matching the longest since 2019, in which they lost 7.5%. And that follows a 19% leap from late July through mid-August.

All told, Nvidia is up 14% in 2026, a decent showing but still a far cry from its past performance. At this time last year, the stock had gained 34%, and in 2024 it was soaring more than 150%. The reason is hardly a secret, with investors increasingly cautious about the durability of the AI trade with inflation remaining high, interest rates rising and geopolitical risks all over the place, whether it's the US's military and economic war with Iran or its trade war with Canada.

The tech-heavy Nasdaq 100 Index suffered its worst month in more than a year in July, falling 6.6% as investors dumped the shares of companies exposed to the AI buildout amid concerns about how much longer the heavy spending would last. But since its July 29 trough, the index has regained much of that lost ground, led by memory and storage companies like Sandisk Corp. and chipmakers such as Marvell Technology Inc.

Wall Street expects Nvidia to deliver stellar results for the fiscal second quarter, which ended July 31. Analysts project that revenue nearly doubled from a year ago, which would be the fastest pace in two years, as did net income, according to data compiled by Bloomberg.

That, however, isn't what the market is focused on. Rather, investors want to hear what Chief Executive Officer Jensen Huang has to say about capital spending by its biggest customers, future demand and a spate of new financing deals that involve Nvidia. Price increases will also be top of mind after some of the company's customers were told that the cost of servers with its AI chips will rise more than 15% in some cases, due to surging memory costs.