--- title: "The ultimate test of the AI wave: NVIDIA's earnings report is coming, will it continue to write the tech stock bull market or trigger the \"wall of worry\"?" type: "News" locale: "en" url: "https://longbridge.com/en/news/287062078.md" description: "NVIDIA will announce its earnings after the market closes on Wednesday, and Wall Street expects it to continue driving the tech stock bull market. Investors are focused on performance and future growth prospects; if the results are disappointing, it may exacerbate market concerns. NVIDIA's stock price has rebounded 34% since hitting a low in March, but has recently given back 6.4%. The company has made a significant contribution to the S&P 500 index, and the market expects it to continue to outperform expectations" datetime: "2026-05-20T12:11:08.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287062078.md) - [en](https://longbridge.com/en/news/287062078.md) - [zh-HK](https://longbridge.com/zh-HK/news/287062078.md) --- # The ultimate test of the AI wave: NVIDIA's earnings report is coming, will it continue to write the tech stock bull market or trigger the "wall of worry"? The Zhitong Finance APP has noted that for most of this year, chip stocks have been the main driving force behind the market's rise. Currently, NVIDIA (NVDA.US) is about to announce its earnings report, which could either validate that this rally still has further room to grow or add another brick to the already high "wall of worry" for investors. The AI semiconductor leader will release its performance after the market closes on Wednesday. Wall Street generally expects another impressive number in this strong earnings season for chip manufacturers—because large tech companies continue to pour cash into building AI infrastructure. For this reason, what investors are really looking for are signals regarding future growth prospects. Joanne Feeney, portfolio manager at Advisors Capital Management, who holds NVIDIA stock, stated, "NVIDIA's performance, guidance, and discussions during the conference call can give investors more confidence that this round of AI investment expansion is not just for one quarter, nor is it just a matter for 2026, but will extend into 2027, 2028, and beyond. This will be reassuring." ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260520/1779278692226487.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Everyone's attention is focused on NVIDIA's performance. However, if the results are disappointing, it will confirm some investors' concerns: the sector may have already run too far ahead. The Philadelphia Semiconductor Index has surged about 60% this year but suffered a cumulative drop of 6.4% over two trading days on Friday and Monday, as inflation concerns weighed on sector sentiment. NVIDIA's stock price has risen about 18% in 2026 and rebounded about 34% since hitting a low in late March, but it has given back 6.4% in the last three trading days; nonetheless, it still outperformed the tech-heavy Nasdaq 100 Index (which has risen about 14% this year). Feeney remarked, "Unfortunately, NVIDIA has raised market expectations to the level of 'surpassing expectations every quarter and raising guidance'—if they don't achieve that, it will lead to disappointment." Although NVIDIA's performance in 2026 may not be as stunning, it remains the "largest individual stock" in the market: NVIDIA has contributed nearly one-fifth of the S&P 500's 7.4% gain this year. Four other chip companies—Micron Technology, Broadcom, AMD, and Intel—also rank among the top seven contributors to the S&P 500's gains in 2026, a level of "sector leadership concentration" that is rare in this cyclical industry. From the perspective of "AI cash permeating the economy," investors certainly have ample reasons for optimism: the four major buyers—Amazon, Alphabet, Microsoft, and Meta—plan to spend as much as $725 billion in capital expenditures this year, with even more expected in 2027. Chips are a major focus of this expenditure, and NVIDIA still holds an overwhelming share of the AI accelerator market. The growth has come so quickly that the stock has begun to appear "cheap." According to compiled data, the market consensus expectation for NVIDIA's net profit in fiscal year 2027 (ending that year in January) has been raised by 13% over the past three months, and revenue expectations have been raised by 12% Driven by this, NVIDIA's current stock price corresponds to less than 24 times the forward earnings expectations, significantly lower than its approximately 36 times 10-year average. Jeff Blazek, Co-Chief Investment Officer of multi-asset at LPL Financial with an asset management scale of about $567 billion, stated, "Valuation issues are secondary; the fundamental growth narrative is the main engine, but the current valuation level is not uncomfortable." He believes that NVIDIA's valuation "allows us to judge relatively its earnings and cash flow—this is not like a bubble." During this earnings season, several chip manufacturers have reported "blowout" results: Intel, AMD, Texas Instruments, NXP, and Synaptics all recorded double-digit increases after announcing their performance. Data compiled by Bloomberg shows that 93% of chip stocks have exceeded expectations this season, with an average beat of nearly 25% (compared to only about 6.6% last season). However, regardless of what numbers NVIDIA reports, replicating the kind of "immediate jump after announcement" is not easy: firstly, its size is much larger than its peers, and to truly drive the stock price requires more exaggerated buying enthusiasm; secondly, it faces competition from rivals like AMD, while core customers Alphabet and Amazon are also ramping up their self-developed chips, forming substantial competition. This also explains why NVIDIA is no longer the "hottest stock in the entire market"—this title has now fallen to memory and storage suppliers, such as SanDisk, Seagate, and Micron. "You might not believe it, but the 'story' leading into this earnings report is actually less compelling than those sexier themes in the market," said Thomas Martin, Senior Portfolio Manager at GLOBALT Investments. "But it (NVIDIA) is a giant." Although NVIDIA's growth prospects remain strong, the market expects its growth rate to gradually decline in the coming years: the company's revenue growth rate for fiscal year 2027 is expected to be about 72%, and about 34% for fiscal year 2028, with further slowdowns thereafter. "The narrative focus is increasingly shifting to 'how long can growth be sustained,' rather than just the performance of a single quarter," said Neville Jawhari, Portfolio Manager at Allspring Global Investments and head of the Empiric LT Equity team, who also holds NVIDIA. He mentioned that he will closely monitor any details regarding Blackwell chip sales and demand for the next-generation Rubin product line. Of course, even if a strong earnings report is delivered, it does not guarantee that NVIDIA's stock will rise the next day: in the past three earnings announcements, the stock price weakened the following day—even when the results themselves were solid. Current pricing in the options market indicates that the stock price may experience about ±5.5% two-way volatility after this earnings report; according to the average target price given by analysts, Wall Street believes there is about a 26% upside potential for the stock over the next 12 months. ![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260520/1779278041467460.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) "If NVIDIA can prove that the new generation of chips is ramping up quickly and that the addressable market size is larger than the market expects—because the expansion cycle is longer than anticipated—it will greatly reassure investors, allowing them to hold onto these leading companies driving AI development with more confidence," summarized Fei Ni from Consultant Capital ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [XLK.US](https://longbridge.com/en/quote/XLK.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) ## Related News & Research - [Nvidia earnings on May 20 could sway AI market sentiment](https://longbridge.com/en/news/286642553.md) - [Nvidia's $78 billion earnings test could reveal the real AI demand story](https://longbridge.com/en/news/286447895.md) - [Joseph P. 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