From Fed Whispers to AI Thunder: Markets Brace for Nvidia’s Moment


In a week marked by bullish sentiment, U.S. stock markets rallied to near-record highs following Federal Reserve Chair Jerome Powell’s suggestion that “time has come for policy to adjust.”

This cryptic yet potent statement sent ripples through the financial world, with investors interpreting it as a hint at potential interest rate cuts in the near future.

The S&P 500 (^GSPC), Nasdaq Composite (^IXIC), and Dow Jones Industrial Average (^DJI) all posted gains exceeding 1% for the week, with the S&P 500 inching tantalizingly close to its all-time peak, sitting less than 1% below its record closing high. This robust performance reflects growing investor confidence in the face of changing monetary policy expectations.

However, the market’s resilience is set to face a crucial test in the coming week, as all eyes turn to Nvidia’s (NVDA) highly anticipated earnings report. The semiconductor giant, which has been at the forefront of the artificial intelligence (AI) revolution, is scheduled to release its quarterly results after the closing bell on Wednesday/Aug. 28.

Nvidia’s previous earnings report in May 2023 catalyzed an AI-driven stock market rally that has shown little sign of abating. As a result, expectations for the company’s performance remain stratospheric.

Wall Street analysts project a staggering year-over-year earnings growth of approximately 109%, accompanied by a near-doubling of revenue compared to the same quarter last year.

Of particular interest to investors and industry watchers will be any updates regarding Nvidia’s new Blackwell chip. Rumors of potential delays have circulated, and any clarification on this front could significantly impact market sentiment. Despite these concerns, Nvidia’s stock has demonstrated remarkable strength, surging more than 150% year-to-date. The name closed on Friday at $129.37 per share.

KeyBanc analyst John Vinh expressed optimism about Nvidia’s prospects, noting [via YF], “We believe modest expectations for Blackwell shipments in FQ3 have been backfilled with higher Hopper bookings.”

Vinh anticipates Nvidia will surpass expectations, driven by robust demand for their Hopper GPUs. Even after a recent 30% rally, Vinh maintains that Nvidia’s stock remains attractively valued, citing the company’s strong position in the booming AI sector.

The significance of Nvidia’s earnings extends beyond the company itself, as noted by Charles Schwab Asset Management CEO and Chief Investment Officer Omar Aguilar. He told Yahoo Finance that the market will be keenly focused on Nvidia’s outlook for AI and future chip demand, as companies continue to invest heavily in AI technologies.

As the week unfolds, investors and analysts alike will be watching closely to see if Nvidia can maintain its momentum and justify its lofty valuation.

The outcome of this earnings report could have far-reaching implications for the broader technology sector and the stock market as a whole, potentially setting the tone for the remainder of the year in the rapidly evolving landscape of AI-driven innovation and investment.

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About Ari Haruni 188 Articles
Ari Haruni is the Co-Founder & CEO of Wall Street Pit.

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