Nvidia $NVDA is set to release second-quarter earnings this week, with all eyes on the chipmaker that has become a bellwether for the artificial intelligence boom.
The Santa Clara, California-based semiconductor manufacturer is “the foundation for the AI Revolution,” researchers at Wedbush, led by Dan Ives, said in a note Thursday. Despite investor attention on the Federal Reserve chair Jerome Powell’s speech at the Jackson Hole conference Friday, Ives wrote that Nvidia’s (NVDA) Wednesday earnings report will be the defining event of the year.
“We believe the most important week for the stock market this year and potentially in years for the Street will be next week as the Godfather of AI Jensen and Nvidia (NVDA) have earnings on deck,” Ives said, referring to Nvidia chief Jensen Huang.
While investors have remained cautious, particularly after a stock market rout sparked fears of a recession and concerns over an end to the tech boom, Ives said the current moment is “a 1995 (almost 1996) start of the Internet Moment and not a 1999 Tech Bubble-like moment.”
Ives is expecting another “drop the mic performance” from Nvidia. Its chips, which are used to train generative AI models at nearly major tech company, are the “new oil and gold in this world,” he said. Nvidia is also currently the only firm with $1 trillion in capital expenditure designated for AI over the next few years, putting it leaps and bounds ahead of its competitors.
The company is expected to bring in $28.72 billion in revenue for the second quarter, according to estimates compiled by FactSet. That would be another record for the chipmaker. Wall Street is also projecting $14.98 billion in net income, with an earnings per share of $0.65.
In the first quarter, Nvidia reported $26 billion in revenues — a 262% increase from a year prior. After reporting those results, Nvidia’s stock price passed $1,000 for the first time. At the time, analysts at Wedbush called the company’s record performance a “masterpiece quarter” and the “ultimate barometer of the AI Revolution.”
Despite Wall Street’s bullish outlook, Nvidia’s stock fell 3.7% to $123.74 apiece Thursday, bringing its market capitalization to $3.04 trillion. Shares were up 1.25% in pre-market trading Friday.
Tech earnings are picking up next week, with Cloud-based software company Salesforce $CRM reporting on Wednesday. The company’s report will provide an important guide for tech stocks, Ives said. Salesforce (CRM) “very soft performance” last quarter, missing revenue expectations for the first time since 2006.
Overall, however, Ive remains optimistic that tech stocks will continue to barrel forward.
“We focus with eyes on the prize: the AI buildout and the tech winners of this 4th Industrial Revolution,” Ives said. “And tech earnings season has only bolstered and validated this bullish view of tech stocks heading into year-end and 2025 with another masterpiece quarter next week expected from Nvidia helping the Street figure out the next frontier and winners in this AI Revolution.”