:max_bytes(150000):strip_icc()/GettyImages-2166465749-891def7939e44a6e96fc62861ee38c57.jpg "Nvidia shares weigh on technology sector ahead of earnings announcement")
Key findings
- Nvidia shares fell as much as 4.4 percent on Wednesday ahead of the release of quarterly results that some called “the most important technology results in years.”
- The chipmaker weighed on its technology sector competitors, including the Magnificent Seven, all of which were in the red on Wednesday afternoon.
- Expectations are high for Nvidia, as the company’s stock price has soared after each earnings release this year.
Technology stocks plunged on Wednesday ahead of Nvidia’s quarterly earnings release, which some investors see as the biggest stock market event of the year.
The Magnificent Seven stocks were all down Wednesday afternoon, led by Nvidia (NVDA), which lost 4.4% at one point but had halved its losses by 1:30 p.m. ET. Microsoft (MSFT), Alphabet (GOOGL) and Amazon (AMZN) lost more than 1%. Tesla (TSLA), Apple (AAPL) and Meta (META) rounded out the group with declines of less than 1%.
Chip stocks also saw a decline, with the PHLX Semiconductor Index losing about 2%, while giants Broadcom (AVGO) and Advanced Micro Devices (AMD) slipping 1.8% and 2.3%, respectively.
The technology-heavy Nasdaq Composite led the major indices lower, losing more than 1 percent.
What Nvidia’s earnings could mean for the markets
Nvidia will report second-quarter fiscal 2025 results after the market closes on Wednesday, and expectations are high for what analysts at Wedbush Securities recently called its “most important technology results in years.”
Analysts expect Nvidia to report a doubling of revenue and profit in the latest quarter compared to the same period last year as technology companies increased spending on artificial intelligence (AI) infrastructure.
The company’s shares rose sharply in the weeks following its two most recent earnings reports, giving the entire stock market a boost. Investors are hoping another stunning quarterly report on Thursday can work the same magic and reignite the tech rally that has driven stocks to a series of records this year.
Nvidia stock has struggled in recent months. Shares plunged more than 25 percent in July and early August as changing interest rate expectations rocked the stock market. Shares have since recovered, but are still more than seven percent below their all-time high. The S&P 500, meanwhile, traded about one percent below its record high on Wednesday.
What analysts are looking for in Nvidia earnings
Reported delays in the chipmaker’s next-generation Blackwell system could have a “modest” impact on quarterly results and near-term outlook, according to analysts at Raymond James.
Morgan Stanley analysts, however, recently said the impact could be so small that executives “may not even notice tactical setbacks.”
Either way, analysts are almost unanimously optimistic about the stock’s long-term prospects. Of the 61 analysts who have covered the stock, 47 have given it a “buy” rating, the highest possible, according to FactSet. Nine have given it an “overweight,” a slightly less emphatic recommendation, and five have rated the stock “neutral.” No Wall Street analyst currently has a negative forecast for Nvidia stock.
