Since ChatGPT launched in November 2022, Nvidia’s market cap has risen by more than $3 trillion. As the company gears up to report earnings this Wednesday, anticipation is at an all-time high and investors are on the edge of their seats, eager to see if Nvidia can sustain its explosive growth. If Nvidia shows even the most remote sign of a fumble it can have repercussions on the market. This year, Nvidia has grown to weigh about 6% of the S&P 500. That is almost double the weight of the next biggest company, Amazon. There has never been a time in financial history where a company rose this high, this fast.
The parts of the business that are important to investors come Wednesday are its AI chips business, specifically its much-hyped, Blackwell chip. The data centre is also very important to investors. The high demand drove it to a record $22.6 billion in revenue, and analysts think this quarter could see as much as $24 billion.
Analysts on the other hand are expecting big things—$28.7 billion in revenue, more than double what they pulled in during the same period last year.
There are things to be concerned about. A.I fatigue is setting in the market with some investors getting worried that the stock growth in companies like Nvidia, Google and Microsoft have exceeded the ability to make money from AI. There are also rumours of delays with Nvidia’s Blackwell chip that sent the stock down 6% earlier this month. However, Nvidia has reassured everyone that production is still on track for later this year. Nvidia is under scrutiny from U.S. regulators investigating whether the company is pushing cloud providers to buy more products than they need or bundling their AI chips in potentially anti-competitive ways.
With its stock up more than 150% this year and a market value skyrocketing to $1.82 trillion, Nvidia isn’t just setting the standard for chips—it’s setting the pace for AI as a whole. It’s earnings this week could make or break parts of the market. We’ll be watching.
What else is happening?
- Salesforce, Best Buy & Autodesk are reporting earnings on Wednesday & Thursday respectively. Read more here.
- Uber and Instacart have grown closer in the last couple of months and it’s giving investors ideas that a merger may be on the cards. Read more here.
- Apple’s CFO will step down from the role in January but remain with Apple in a corporate services job. More here.
Before we leave, here is one stock in the Nigerian Stock Market we’re keeping an eye on this week:
AIICO: AIICO Insurance Plc (AIICO) is a leading financial services group with strong market positions in its core segments: Insurance, Health Maintenance, and Asset Management. This makes it a good time to consider investing in AIICO shares, as its RSI is below the oversold region and the MFI indicating improved buying activity. Hence, we foresee potential gains for this stock.
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