All
eyes
will
be
on
Nvidia
next
week
as
investors
consider
what’s
next
for
the
AI
trade.
Stocks
have
reached
all-time
highs
this
week,
crashing
through
one
milestone
after
another
as
cooler
inflation
data
cheered
investors
worried
about
a
Federal
Reserve
that
could
keep
interest
rates
higher
for
longer.
The
Dow
Jones
Industrial
Average
topped
the
40,000
threshold
for
the
first
time
ever.
The
S
&
P
500
broke
above
5,300,
also
for
the
first
time.
The
S
&
P
500
has
notched
record
close
after
record
close
in
2024.
But
what’s
different
about
this
most
recent
advance
is
that
the
broad
market
benchmark
has
managed
to
notch
its
latest
all-time
high
without
the
help
of
the
Magnificent
Seven
that
so
wholly
dominated
the
early
part
of
this
year’s
rally.
This
quarter,
the
top-performing
S
&
P
500
sector
is
utilities,
higher
by
9%,
followed
by
communication
services,
up
by
4%.
The
worst-performing
sector
is
consumer
discretionary,
which
is
down
by
more
than
2%
and
includes
the
mega
caps
Amazon
and
Tesla.
But
Nvidia’s
earnings
results
on
Wednesday
could
reinvigorate
a
trade
that
still
has
the
power
to
propel
markets
higher,
backed
by
investors
animated
by
the
transformative
potential
of
artificial
intelligence.
The
$2.3
trillion
company
is
the
third
largest
S
&
P
500
stock
by
market
cap,
and
has
an
expected
move
of
roughly
8%,
meaning
the
stock
could
go
up
or
down
that
percentage
amount
on
its
quarterly
report.
In
other
words,
the
results
could
be
a
market-moving
event
given
the
chipmaker’s
sheer
size
and
popularity.
“Nvidia
will
be
the
stock
that
doesn’t
make
it
as
boring
as
it
has
been
on
this
rally,
because
when
utilities
are
leading
and
financials
are
leading,
they’re
not
headline
makers,”
said
Jay
Woods,
chief
global
strategist
at
Freedom
Capital
Markets.
“Nvidia
is
a
headline
maker,
so
I
can’t
wait
to
see
how
the
market
reacts
to
that.”
NVDA
YTD
mountain
Nvidia
For
investors,
the
results
could
help
the
major
averages
continue
to
move
higher
—
or
dent
their
momentum.
On
Friday,
the
30-stock
Dow
registered
its
fifth
straight
winning
week,
a
streak
it
hadn’t
made
since
February.
The
S
&
P
500
and
Nasdaq
Composite
each
closed
out
a
fourth
straight
week
of
gains.
Market
mover
By
now,
investors
are
used
to
Nvidia
beating
expectations
in
its
earnings
reports,
as
exorbitantly
high
as
they
are.
In
fact,
Piper
Sandler’s
Harsh
Kumar,
who
has
a
buy
rating
on
the
stock,
said
he
anticipates
the
chipmaker
will
beat
revenue
expectations
by
$1.5
billion
to
$2
billion
in
its
upcoming
report.
Over
the
last
three
quarters,
Nvidia’s
top
line
beat
by
$1.9
billion
on
average,
he
noted.
Kumar
expects
that
means
markets
could
take
it
in
stride
if
the
chipmaker
meets
or
somewhat
exceeds
expectations.
As
far
as
AI
investors
are
concerned,
however,
what’s
most
important
is
any
details
that
CEO
Jensen
Huang
may
share
in
terms
of
future
demand
for
the
Nvidia’s
products.
While
the
firm’s
newest
generation
of
AI
graphics
processors
called
Blackwell
are
expected
to
be
“astoundingly
better”
compared
to
competitors,
Kumar
said,
investors
are
seeking
signs
that
demand
continues
to
remain
robust,
and
orders
remain
on
track.
Strong
guidance
has
the
potential
not
only
to
lift
Nvidia,
but
also
the
broader
AI
trade
as
software
names
take
more
of
a
backseat
lately.
“That’s
a
fresh
catalyst”
for
that
theme,”
Horizon
Investments’
Zachary
Hill
said.
But
investors
may
be
less
forgiving
of
a
disappointment
from
the
market
darling
of
the
past
year.
Chris
Zaccarelli,
investment
chief
at
Independent
Advisor
Alliance,
said
he
could
see
the
broader
markets
sell
off
by
“more
than
1%”
—
in
fact,
by
1.5%,
2%,
or
“something
worse”
—
if
Nvidia’s
messaging
spooks
investors,
largely
because
of
the
place
the
chipmaker
holds
in
their
imaginations.
“Nvidia
really
is
the
poster
child
for
the
AI
revolution,
for
all
the
excitement
people
have
about
potential
productivity
gains
and
a
new
era
of
computing
through
artificial
intelligence,”
Zaccarelli
said.
“So
if
they
can
continue
to
exceed
expectations,
I
think
that
does
a
lot
towards
driving
sentiment
higher.”
“Conversely,
if
they
give
a
bad
forecast
or
a
disappointing
earnings
result,
I
think
a
lot
of
the
positive
sentiment
that
we
have
had
this
week
could
reverse,”
Zaccarelli
added.
Still,
the
view
on
Nvidia
outside
of
next
week’s
earnings
report
is
more
sanguine.
Regardless
of
how
Nvidia’s
stock
performs
after
the
firm’s
results,
investors
expect
the
long-term
story
is
still
intact,
and
many
anticipate
that
any
dips
in
stock
price
will
be
quickly
bought
up. Nvidia
is
up
nearly
87%
this
year,
but
has
only
gained
upward
of
2%
this
quarter.
“Regardless
of
how
they
perform,
I
still
think
over
the
long
term,
this
should
be
in
everyone’s
portfolio
to
some
magnitude,”
Freedom
Capital
Markets’
Woods
said.
“It
is
the
leading
AI
play.”
Sustaining
all-time
highs
Nvidia’s
earnings
will
also
be
a
key
catalyst
at
a
time
when
technicians
are
watching
to
see
whether
stocks
can
sustain
the
record
levels
they
reached
this
week.
Fairlead
Strategies’
Katie
Stockton
said
she
is
watching
to
see
if
the
S
&
P
500
can
keep
above
the
5,260
resistance
level
through
next
Friday,
a
confirmation
of
the
breakout
that
would
be
a
bullish
development
for
stocks.
But
the
technician
is
also
concerned
that
there
could
be
further
weakness
ahead,
citing
mixed
signals
in
momentum
indicators.
“The
short-term
gauges,
momentum
wise,
of
course,
point
higher,
but
the
intermediate-term
gauges
point
mostly
lower,”
Stockton
said.
“So,
we
still
have
a
situation
where
we
feel
the
market
is
vulnerable
to
one
more
downdraft
to
the
corrective
phase
that
began
in
April.”
“We’re
sort
of
watching
and
waiting
to
see
how
it
plays
out,”
Stockton
added.
Week
ahead
calendar
All
times
ET.
Monday,
May
20
No
notable
events.
Earnings:
Palo
Alto
Networks
Tuesday,
May
21
No
notable
events.
Earnings:
AutoZone
,
Lowe’s
Companies
Wednesday,
May
22
10
a.m.
Existing
Homes
Sales
(April)
2
p.m.
FOMC
Minutes
Earnings:
Nvidia
,
TJX
Cos
.,
Analog
Devices
,
Target,
Raymond
James
Thursday,
May
23
8
a.m.
Building
Permits
8:30
a.m.
Chicago
Fed
National
Activity
Index
8:30
a.m.
Continuing
Jobless
Claims
8:30
a.m.
Initial
Claims
9:45
a.m.
PMI
Composite
preliminary
9:45
a.m.
S
&
P
PMI
Manufacturing
preliminary
9:45
a.m.
S
&
P
PMI
Services
preliminary
10
a.m.
New
Home
Sales
11
a.m.
Kansas
City
Fed
Manufacturing
Index
Earnings:
Intuit
,
Ralph
Lauren
Friday,
May
24
8:30
a.m.
Durable
Orders
—
CNBC’s
Nick
Wells
contributed
to
this
report.
