All eyes are on Nvidia . Nvidia is slated to post fiscal second-quarter earnings after the bell Wednesday. Analysts have lofty expectations for the chipmaker, with Refinitiv averages pointing to a more than 300% year-over-year profit increase and revenue growth exceeding 60%. The report could also send ripples through the entire stock market . Nvidia is far and away the best-performing S & P 500 member this year, up more than 200% in that time. The chipmaker has also outperformed since the October market low, rallying nearly 300%. “It’s going to be an important report. Nvidia is at the center of what has really been an AI secular theme. They obviously have great demand, so investors are expecting a great result. But, it could still surprise markets,” Tom Lee, head of research at Fundstrat, told CNBC’s “Worldwide Exchange” on Wednesday. “There were a lot of investors who got nervous as Nvidia was selling off and correcting in July. So, I think there’s going to be some sort of reload … if the results are good,” Lee added. NVDA YTD mountain NVDA in 2023 The report will come during a tough time for the market. The S & P 500 is down more than 4% in August, on pace for its first monthly decline since February. Nvidia has also struggled this month, losing more than 2%. That puts it on track to post its first one-month loss since April. There are also concerns that this may be an overly crowded trade, which could prime it for a decline if Wednesday’s report underwhelms Wall Street. Goldman Sachs traders noted Nvidia is held by most types of investors around the world. However, they also said they still “sense continued incremental enthusiasm to add to this story … as NVDA remains one of the few thematic plays that is seeing a material uplift to numbers from AI in the near term.” They added that the results could be “particularly impactful for the other biggest perceived AI beneficiaries” such as AMD , Marvell Technology and Taiwan Semiconductor . Bottom line: Anticipation around a quarterly earnings report hasn’t been this high in a while, meaning investors may want to brace for market volatility in the near term. — CNBC’s Michael Bloom contributed reporting.
