The results of Nvidia's earnings report could have broader implications for the market, with experts suggesting that disappointing results could trigger a wider sell-off. Despite Nvidia's stock surpassing Tesla as the most-traded stock in the last 30 trading sessions, there are questions about whether people will continue to buy it. Cathie Wood's Ark Invest has been selling its shares, with Wood suggesting that expectations for Nvidia could be overly optimistic.
Key takeaways:
- Nvidia is set to post its fourth-quarter earnings, which could be the most important report of the season, as its GPUs play a crucial role in powering large-language AI models.
- The company's shares have skyrocketed 230% over the past 12 months, outperforming the rest of the 'Magnificent 7' Big Tech stocks.
- Regulations have limited Nvidia’s business in China, a market that accounted for 20% of its revenue in 2023, and there are concerns about whether its rapid stock growth is sustainable.
- Disappointing results from Nvidia could potentially lead to a wider market sell-off, with stocks dropping by as much as 10%, due to investors being short of cash.