Nvidia (NVDA) steps into earnings week carrying more pressure than any other company in the market right now. The stock has surged nearly 1,000% since the launch of OpenAI’s (PC:OPAIQ) ChatGPT in late 2022, turning the chipmaker into the clearest barometer for investor appetite around artificial intelligence. The excitement is still there, but the tone heading into this week feels noticeably more cautious.
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Nvidia now accounts for about 8% of the S&P 500 (SPX) and close to 10% of the Nasdaq Composite. This influence alone means the results can swing broader markets, especially at a moment when investors are uneasy about stretched tech valuations and fading confidence in AI capital spending.
AI Demand May Have Gotten Too Frothy
Analysts have been flagging a growing concern that AI demand has gotten too frothy. Vital Knowledge captured the mood clearly. The team wrote that “The rising tide of AI skepticism is occurring for (largely) legitimate reasons, and this will remain an overhang for tech, even if the Nvidia results/guidance are great.” They followed that warning by adding, “In fact, ’great Nvidia results’ is ironically part of the problem as the company’s success is becoming mutually exclusive with the health of the overall AI ecosystem.”
These remarks reflect a broader fear that Nvidia’s dominance may be overshadowing the ecosystem that depends on it. Some investors worry that too much spending is looping back into the same narrow set of suppliers, which raises questions about sustainability.
Wall Street Expects Enormous Numbers for Nvidia
Analysts expect the company to report about $30.53 billion in Fiscal third-quarter net income and roughly $54.8 billion in revenue. Forecasts for the January quarter point to $61.8 billion in revenue and $34.93 billion in net income.
These expectations set a high bar. The challenge for Nvidia is not only delivering the numbers but also convincing investors that spending from hyperscalers and enterprise customers can keep pace with the company’s blistering growth.
BofA (BAC) said Nvidia faces a delicate setup and needs to reassure the market that AI demand is durable. The bank argued that sentiment around AI has cooled recently, which could help Nvidia if the company presents strong underlying trends.
Is Nvidia a Good Stock to Buy?
Wall Street remains firmly bullish on Nvidia, with the stock earning a Strong Buy rating from analysts surveyed over the past three months.
A group of 39 analysts now tracks Nvidia, and 37 of them have Buy ratings in place. Only one analyst says to Hold and one says to Sell. Their collective 12-month NVDA price target sits at $242, which implies about 27% upside from Nvidia’s latest close.
