Why all eyes are on Nvidia amid jittery stock market

NVIDIA is set to report quarterly earnings after markets close Wednesday, and all eyes will be on the company for signals about the artificial intelligence industry.

All eyes are on Nvidia’s quarterly earning results Wednesday evening amid a stock market that’s seeing increasingly jittery movements in technology companies over recent weeks.

That comes as many investors have seen significant growth from stocks and other investments tied to artificial intelligence in recent years, but also amid a lot of volatility in the sector tied to the earnings results of these companies — and the sky-high expectations some investors have for them.

“I’d say this started out with the launch of ChatGPT as sort of the first consumer-facing AI tool. It has risen meteorically on the investor landscape, and they are making extraordinarily large investments into AI as they see it’s the future,” says James Price, a portfolio manager with MBP Sterling Partners at RicharsonWealth.

“AI has really been front and foremost for investors and for driving market returns over the last couple of years, but probably more importantly, really driven it over the last several months.“

The S&P 500 is coming off a four-day losing streak, its longest in nearly three months, and has been shaky because of worries that stock prices have shot too high and that the U.S. Reserve may not deliver as many energizing cuts to interest rates as earlier expected.

Nvidia is one of a handful of big technology companies specializing in the design and manufacturing of hardware for complex computer systems and data centres, including semiconductor chips used in artificial intelligence.

With AI’s rapid development in recent years, Nvidia has seen a surge in demand for its chips and data centres. As of publication, Nvidia is the world’s most valuable company worth just under US$5 trillion in market valuation. That’s more than Microsoft, Apple, Alphabet and Amazon.

Nvidia has seen most of its market valuation accumulated over just the past few years, and has climbed about 35 per cent in the past six months as of publication.