<div id="readability-page-1"><p>All eyes are on <strong>Nvidia </strong><span>(NVDA<span> 3.07%</span>)</span> today as it prepares to report earnings. Why is the report such a big deal? For a couple of reasons. Nvidia dominates an area that drove stock market gains over the past two years, and investors are looking for clear signals of what's ahead. I'm talking about artificial intelligence (AI), a technology that some say could become the next internet or telephone from an innovation perspective.</p> <p>Nvidia is the world's leading maker of AI chips, the tools that power this entire revolution. So any words from Nvidia may set the tone not only for this AI giant but for other companies that operate within the space.</p> <p>Also, this latest earnings report may be crucial as it's set against a backdrop of recent challenges, from President Trump's import tariff plan to the government's restrictions on chip exports to China. These elements weighed on Nvidia's stock, and it dropped as much as 29% from the start of the year through early April. Since then, the shares have rebounded amid signs that import tariffs won't be as severe as initially planned, leaving Nvidia stock down about 2% for the year as of May 23.</p> <p>Now, let's consider what to watch for during this upcoming big moment for Nvidia and for investors.</p> <div><p><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTk1NjQvZ2V0dHlpbWFnZXMtMTMxNjI2NDE5MS5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MTk1NjQvZ2V0dHlpbWFnZXMtMTMxNjI2NDE5MS5qcGcmdz03MDA"/></p><p>Image source: Getty Images.</p> </div> <h2>Nvidia's gross margin</h2> <p>First, it's important to note that Nvidia has established a track record of beating analysts' earnings estimates, so investors are eager to see if this continues, particularly as the company still is in the launch phase of its Blackwell architecture. New product rollouts are costly times, so investors want to know whether Nvidia has been able to keep gross margin in the low 70% range, in line with its earlier forecasts. This would show high profitability on sales continues.</p> <p>Nvidia customers, from <strong>Meta Platforms</strong> to <strong>Alphabet</strong>, have offered us bright news in their recent earnings reports, saying they're sticking with their capital spending plans for the year. Meta even increased its spending forecast. Now, when Nvidia reports, it's key to listen for any related comments regarding demand to confirm that these spending plans will indeed benefit Nvidia. These customers are likely to continue pouring investment into Nvidia products and services, but competitors exist, and Nvidia customers even may be considered competitors themselves as some have created their own AI chips.</p>  <p>Another point to watch for is any commentary on exports to China. Nvidia earlier said it would be taking a $5.5 billion charge in the quarter related to the H20 chip it designed for the Chinese market. The U.S. recently halted sales of that product, saying Nvidia needed an export license.</p> <h2>Reports of Nvidia's efforts in China</h2> <p>Meanwhile, press reports have suggested Nvidia is considering other ways of maintaining its presence in the China market, one that represented 13% of sales in the latest fiscal year. For example, Nvidia plans on launching new chips for China and may start mass production as early as next month, Reuters reported, citing sources familiar with the project.</p> <p>Finally, Nvidia, which weeks ago announced a new investment in manufacturing in the U.S., may offer more details regarding that effort. Trump's tariffs don't yet apply to electronics, but the president has said he plans to set duties specifically for these types of products. Nvidia generally has relied on production in Taiwan but now aims to bring more and more of this back home. It will be important to see how these moves affect Nvidia's cost structure, and whether any impact will be felt in the near term or farther down the road. Nvidia has said two U.S. facilities should start to ramp up within a year to 15 months.</p> <p>Nvidia has proved itself to be a bellwether for the tech industry, so the company's earnings report could offer not only its stock but the shares of other tech players direction this week. Though this earnings report is a big moment, investors should remember that it still offers a short-term picture of both Nvidia and the general AI market environment. And that means whether Nvidia surprises to the upside or not, you may win by holding this top AI player and other quality tech stocks over the long term.</p>                                                                            </div>

NVDA

<p>Nvidia is set to report earnings, a significant event as it leads the AI chip market. Investors are keen to see if Nvidia maintains its gross margin amid new product launches and competition. Key points to watch include demand from major customers like Meta and Alphabet, commentary on exports to China, and updates on U.S. manufacturing investments. Nvidia's performance could influence the tech sector, providing insights into the AI market's future. Despite potential short-term fluctuations, long-term investment in Nvidia and quality tech stocks remains promising.</p>

- Nvidia is set to report earnings, which is significant due to its dominance in the AI chip market and its impact on stock market trends.  
- Investors are particularly interested in Nvidia's gross margin and demand from major customers like Meta and Alphabet, as well as the implications of U.S. export restrictions on its sales to China.  
- The earnings report may influence not only Nvidia's stock but also the broader tech industry, highlighting the importance of long-term investment in quality tech stocks.  

Nvidia's Big Moment Is Just Ahead. Here's What to Watch For.