LOS ANGELES (AP) — Nvidia is set to announce its latest financial results on Wednesday, with a particular focus on the sales performance of its artificial intelligence chip, Blackwell. Analysts are particularly interested in assessing future demand for these chips, especially following claims from Chinese startup DeepSeek, which asserts that it can train competitive AI models using significantly fewer resources.
Wall Street projections anticipate that Nvidia will report fourth-quarter adjusted earnings of 85 cents per share, with revenue expected to reach $38.08 billion. Analysts predict that the company's net income for the quarter may be as high as $19.58 billion. Nvidia's performance will be closely scrutinized as its stock is a crucial element for the overall U.S. stock market. It is currently the second-largest company on Wall Street, trailing only Apple, which places significant weight on Nvidia's stock movements within the S&P 500 and other major indices.
Currently, Nvidia's market capitalization exceeds $3 trillion, positioning it as a technology giant based in Santa Clara, California. The rise of Nvidia and other companies linked to the AI sector has played a pivotal role in propelling the S&P 500 to a succession of record highs, with the latest milestone achieved recently. The substantial profits driven by these tech firms have contributed to the market's resilience, even amid concerns about persistent inflation and economic challenges potentially arising from tariffs and policies under President Donald Trump.
Remarkably, Nvidia accounted for more than 20% of the total return of the S&P 500 index last year, a figure unmatched by any of the other 499 companies listed in the index. If Nvidia fails to maintain its growth trajectory, particularly amidst criticisms suggesting that its stock price has escalated excessively and too rapidly, investors holding S&P 500 index funds—such as those in 401(k)s—could face potential financial setbacks.
The anticipated fourth-quarter earnings report will mark Nvidia's first since Chinese firm DeepSeek claimed it has developed a large language model capable of competing with prominent AI systems like ChatGPT. DeepSeek asserts that their model is more cost-efficient to train using Nvidia chips. The market reacted sharply to this news, resulting in a temporary loss of $595 billion in Nvidia's market value. In response, Nvidia expressed appreciation for DeepSeek's advancements, describing them as “an excellent AI advancement” that complies with export controls and utilizes readily available models and computational resources.
Nvidia has established a leading position in the artificial intelligence sector, a feat largely attributed to the vision and strategy of founder and CEO Jensen Huang. The company has a history of making significant technological investments, such as its invention of the graphics processing unit (GPU) in 1999. This innovation not only ignited the PC gaming market but also transformed the landscape of computer graphics.
Nvidia is scheduled to release its quarterly earnings report after the market closes on Wednesday, setting the stage for potential shifts in investor sentiment and market dynamics.
