{"id":1287,"date":"2025-08-27T19:04:52","date_gmt":"2025-08-27T19:04:52","guid":{"rendered":"https:\/\/www.worldpumpnews.com\/?p=1287"},"modified":"2025-08-27T19:04:52","modified_gmt":"2025-08-27T19:04:52","slug":"investors-look-to-nvidia-earnings-for-strength-of-ai-growth","status":"publish","type":"post","link":"https:\/\/www.worldpumpnews.com\/?p=1287","title":{"rendered":"Investors look to Nvidia earnings for strength of AI growth"},"content":{"rendered":"<p><\/p>\n<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=d7a2ecb4-9829-4cfe-819f-cd9ba4dd2d96\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Wall Street\u2019s faith in the artificial intelligence boom that has powered US equities markets to record highs will be put to the test on Wednesday when $4tn chipmaker Nvidia unveils its hotly anticipated quarterly earnings report. <\/p>\n<p>Nvidia, the world\u2019s most valuable public company, has surged by more than 35 per cent this year, becoming the first group to reach $4tn in market value. It has been a significant contributor to the S&amp;P 500\u2019s 10 per cent rise in 2025 because of its mammoth market value.<\/p>\n<p>Investors are betting that enthusiasm surrounding rapid advancements in AI, which has also boosted companies such as Microsoft, Amazon and Palantir, will continue to be a dominant factor in the coming years. <\/p>\n<p>\u201cIt\u2019s not just a single stock,\u201d said Arun Sai, multi-asset portfolio manager at Pictet Asset Management. \u201cIt\u2019s very unusual \u2014 people read through it to the economy as a whole.\u201d<\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Aa94a4c17-afa4-43a0-b143-34522883041b?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Aa94a4c17-afa4-43a0-b143-34522883041b?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Aa94a4c17-afa4-43a0-b143-34522883041b?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=3 3x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Aa94a4c17-afa4-43a0-b143-34522883041b?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=4 4x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Aa94a4c17-afa4-43a0-b143-34522883041b?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=5 5x\" width=\"3500\" height=\"2500\"\/><source media=\"(max-width: 490px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ab77e14af-7456-45e0-8ac9-a9c2280666c1?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ab77e14af-7456-45e0-8ac9-a9c2280666c1?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ab77e14af-7456-45e0-8ac9-a9c2280666c1?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=3 3x\" width=\"1500\" height=\"2000\"\/><img decoding=\"async\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2Fc9ea8220-8202-11f0-9c57-21265c1d83c6-standard.png?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1\" alt=\"Line chart of Share price, $ showing Nvidia shares soar\" data-image-type=\"graphic\" width=\"3500\" height=\"2500\" loading=\"lazy\"\/><\/picture><\/figure>\n<p>Nvidia shares were slightly higher on Wednesday afternoon.<\/p>\n<p>Its earnings report \u2014 due after the market closes in New York \u2014 comes at a time of growing concern over the lofty valuations of companies tied to AI. <\/p>\n<p>The tech-heavy Nasdaq 100 index is trading at about 28 times expected earnings over the next year, well above the 25-year average of 22 times, with Nvidia currently trading at about 41 times its expected earnings, FactSet data shows. <\/p>\n<p>Tech stocks fell last week, as a gloomy report from the Massachusetts Institute of Technology and comments by OpenAI chief Sam Altman cast doubt on the sector\u2019s months-long surge.<\/p>\n<p>Many market participants are viewing Nvidia\u2019s earnings report in the same vein as blockbuster economic reports that often sway markets.<\/p>\n<p>\u201cIt\u2019s not just that Nvidia is a large holding for investors,\u201d said Jon Zauderer, head of North America specialist sales at Citigroup. \u201cThey are the locomotive of this AI train. There is so much scrutiny of their messaging.\u201d<\/p>\n<p>Daniel Newman, chief executive of The Futurum Group, a research company, echoed that sentiment, saying \u201can unexpected surprise\u201d \u2014 a clear miss on either revenue or guidance \u2014 \u201cwould be the ultimate and fastest way to send the market into a tailspin\u201d.<\/p>\n<p>Nvidia\u2019s biggest customers, Microsoft, Google, Meta and Amazon, have signalled in recent weeks that they plan to invest huge amounts in AI infrastructure, with spending on track to reach $350bn this year. <\/p>\n<p>Nvidia makes graphics processors that are widely used to train models that underpin products such as OpenAI\u2019s ChatGPT and Google\u2019s Gemini. <\/p>\n<p>Analysts expect Nvidia to report $46bn in revenue for its July quarter, according to a FactSet poll. Market expectations have climbed steadily since June, as the tech sector\u2019s multi-month gains have further lifted hopes for Nvidia\u2019s performance.<\/p>\n<p>If analysts\u2019 predictions prove to be correct, that would put revenue growth at 54 per cent year-over-year, strong for a large, established company, but still a drop from the previous quarter\u2019s 69 per cent and well below the more than 250 per cent recorded in early 2024. <\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3911d74f-a9f4-4d88-84dc-36211c381c6c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3911d74f-a9f4-4d88-84dc-36211c381c6c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3911d74f-a9f4-4d88-84dc-36211c381c6c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=3 3x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3911d74f-a9f4-4d88-84dc-36211c381c6c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=4 4x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3911d74f-a9f4-4d88-84dc-36211c381c6c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=5 5x\" width=\"3500\" height=\"2500\"\/><source media=\"(max-width: 490px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ac7b11871-d243-4bda-922e-ec577e2c8fd5?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ac7b11871-d243-4bda-922e-ec577e2c8fd5?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ac7b11871-d243-4bda-922e-ec577e2c8fd5?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=3 3x\" width=\"1500\" height=\"2000\"\/><img decoding=\"async\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2F9364fd20-8202-11f0-978a-8f0e848aef13-standard.png?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1\" alt=\"Line chart of Nasdaq 100 (forward p\/e ratio) showing US tech stock valuations rise\" data-image-type=\"graphic\" width=\"3500\" height=\"2500\" loading=\"lazy\"\/><\/picture><\/figure>\n<p>Joseph Moore, a semiconductor industry analyst at Morgan Stanley, said markets should not be overly concerned with the slowdown in revenue growth.<\/p>\n<p>\u201cPeople will be more focused on growth relative to peers, and right now they are doing very well in that regard. The market is comfortable with where they are from a growth standpoint,\u201d he said.<\/p>\n<p>Another factor that will be watched closely by analysts is Nvidia\u2019s outlook for the China AI chip market. An unconventional deal with the Trump administration earlier this month saw Nvidia agree to pay 15 per cent of sales to the government in exchange for a licence to sell its watered-down H20 chips in China.<\/p>\n<p>But the company has to navigate a political backlash against the chips in Beijing, as well as mobilise its supply chain to start producing them again at volume.<\/p>\n<p>\u201cYou never know where expectations are [around Nvidia] \u2014 typically the whisper numbers are higher,\u201d said Stacy Rasgon at Bernstein, pointing to a phenomenon where traders expect numbers that are different from Wall Street\u2019s consensus forecasts.<\/p>\n<p>He added that while China chip sales have been a relatively small fraction of Nvidia\u2019s revenue in the past, and have been phased out of its guidance for the time being, \u201cinvestors will be asking: are they actually making stuff for China, or are they not?\u201d <\/p>\n<p>Strong results have not always translated into strong returns for shareholders, or broad optimism for the market.<\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title o3-type-body-highlight\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image js-teaser\" data-id=\"d01290c9-cc92-4c1f-bd70-ac332cd40f94\">\n<div class=\"o-teaser__image-container js-teaser-image-container\">\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2048\/1152\"><img decoding=\"async\" class=\"o-teaser__image\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fwww.ft.com%2F__origami%2Fservice%2Fimage%2Fv2%2Fimages%2Fraw%2Fhttps%253A%252F%252Fd1e00ek4ebabms.cloudfront.net%252Fproduction%252Fa6ad47c2-ed4f-4ad8-a07b-6ec89484cec2.jpg%3Fsource%3Dnext-article%26fit%3Dscale-down%26quality%3Dhighest%26width%3D700%26dpr%3D1?source=next&amp;fit=scale-down&amp;dpr=2&amp;width=240\" alt=\"\"\/><\/div>\n<\/div>\n<\/div>\n<\/aside>\n<p>After Nvidia beat the market\u2019s expectations for profit and revenue in February, the stock dropped 8.5 per cent the following day. <\/p>\n<p>Those results came at a time when markets were uneasy about advancements by China\u2019s DeepSeek, which claimed to achieve similar performance to US rivals but with less expensive chips. <\/p>\n<p>\u201cAt these valuations, both things matter: the macro outlook and Nvidia\u2019s own performance, or the micro,\u201d said Moore at Morgan Stanley. \u201c[In February] people were questioning the macro and micro conditions\u2009.\u2009.\u2009.\u2009[but now] it should be a very strong result.\u201d<\/p>\n<div class=\"n-content-video n-content-video--internal\" data-component=\"video\">\n<div class=\"n-content-video__placeholder\" data-o-component=\"o-video\" data-o-video-id=\"1993553a-6855-47f4-8c2f-6a5d4d5f0507\"><span>Video:  Nvidia&#8217;s rise in the age of AI | FT Film<\/span><\/div>\n<\/div>\n<\/div>\n<p>#Investors #Nvidia #earnings #strength #growth<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Wall Street\u2019s faith in the artificial intelligence boom that has powered US equities markets to record highs will be put to the test on Wednesday when $4tn chipmaker Nvidia unveils its hotly anticipated quarterly earnings [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1288,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[828,166,42,354,829],"class_list":{"0":"post-1287","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","9":"tag-growth","10":"tag-investors","11":"tag-nvidia","12":"tag-strength"},"_links":{"self":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1287","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1287"}],"version-history":[{"count":0,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1287\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/media\/1288"}],"wp:attachment":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1287"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1287"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1287"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}