Why do Nvidia earnings impact the US stock market?

Nvidia has grown into the second-largest company on Wall Street, meaning its stock movements significantly impact the S&P 500 and other indexes—second only to Apple. Why do Nvidia earnings impact the US stock market? Why do Nvidia earnings impact the US stock market? Sales of Nvidia's artificial intelligence chip, Blackwell, will be a key focus when the company releases its latest financial results late on Wednesday. Analysts are closely watching future demand, especially after Chinese firm DeepSeek claimed it could train competitive AI models using fewer resources. Wall Street expects Nvidia to report fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion (€36.4bn), according to FactSet. The company's net income is projected to reach $19.58 billion (€18.7bn). Nvidia's impact on the stock market Nvidia's performance matters for the entire US stock market. The tech giant, based in Santa Clara, California, is now worth more than $3 trillion (€2.9tn). As a key player in the AI boom, Nvidia has significantly contributed to the S&P 500's record-breaking performance, even amid concerns about inflation and economic policies under President Donald Trump. DeepSeek challenges US dominance Last year, Nvidia alone accounted for more than a fifth of the S&P 500 index's total return—far exceeding any of the other 499 companies. If the company's momentum slows, particularly as critics argue that its stock has risen too quickly, Americans with S&P 500 index funds could face financial setbacks. This earnings report will be Nvidia's first since DeepSeek, a Chinese AI firm, announced it had developed a large language model capable of competing with ChatGPT and other US rivals. DeepSeek claimed its model is more cost-effective in training with Nvidia chips. The market reaction to DeepSeek’s announcement briefly wiped out $595 billion (€568.50bn) from Nvidia's valuation. However, Nvidia responded positively, calling DeepSeek's work "an excellent AI advancement" that utilizes "widely-available models and compute that is fully export control compliant." Nvidia's legacy and future Nvidia secured an early lead in AI applications, thanks to CEO Jensen Huang’s vision in betting on the chip technology powering the industry. The company has a history of making bold moves—its 1999 invention of the graphics processing unit (GPU) revolutionized PC gaming and computer graphics. Nvidia will release its quarterly earnings report after the market closes on Wednesday, with investors eagerly watching its performance and future outlook.

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