Nvidia Corp.’s near $3 trillion gain in market value since ChatGPT’s debut has upended the US stock market dynamics, making the AI chipmaker a critical influence in the leading equity indexes. That status was evident in the recent market gyrations. As of Thursday, the S&P 500 went up almost $4 trillion in market cap during the market session from August 5 to the close on August 23 when Nvidia stock rallied almost 28% through three weeks.
Earnings are on tap for Wednesday, and traders are bracing for volatility: the options market is pricing a 10% surge or fall in Nvidia’s share price, a move that would snap the company’s market cap by about $300 billion.
As of now, Nvidia makes up 6.7% of the S&P 500 and is the second-largest company after Apple, and is a major weighting component in the Nasdaq 100 and the Philadelphia Semiconductor Index. “Nvidia is the cleanest, purest way for investors to judge the health of AI infrastructure space,” John Belton, portfolio manager at Gabelli Funds, said.
Nvidia’s performance has become an essential indicator for the rest of the field in AI because of multiple successive times beating expectations and making enormous gains from AI-related venture activity. It has made the company not just a semi-industry niche operator but a sign of US economic general health. “It shouldn’t be a barometer for the economy,” Shana Sissel, founder and president of Banríon Capital Management, said, “but it has become one because of the size and the impact of the stock on the overall market.” Wall Street anticipates Nvidia to report more than $29 billion in quarterly sales more than double last year.
There has been concern on Wall Street about potential Blackwell chip delays and architecture issues. The company indicated that production was moving as anticipated, but investors are looking out for comments in the Thursday earnings report. “Blackwell chip delay concerns could act as an overstated upside risk to fiscal 2025 expectations,” Bloomberg intelligence analysts say.
Aside from delays, the world is looking for signal indications for Nvidia’s H-200 chip, which could offset Blackwell’s revenue issues. “It’s probably a good sign if they put up perfect numbers here, and those are from strong demand for H-200”.
