Despite the recent recovery in technology stocks, mega-cap companies like Alphabet (GOOG, GOOGL), Amazon (AMZN) and Microsoft (MSFT) have all seen share prices decline over the past month as investors question the future viability of artificial intelligence.

Shares of Alphabet, Google’s parent company, have fallen 14 percent, while Amazon shares have lost about 8 percent. Microsoft shares have fallen more than 7 percent since Thursday’s close. But Nvidia’s earnings due later this month could be the next big catalyst for Big Tech and the AI ​​industry as a whole.

Dan Howley of Yahoo Finance reports:

The chipmaker’s performance could shake up the AI ​​trade more than any other hyperscaler. Unlike those software firms, revenue hasn’t been a problem for Nvidia. But if the company falls short of Wall Street’s already high expectations, it could bring the AI ​​trend down with it.

Alphabet, Amazon and Microsoft’s AI spending may give investors pause, but it’s helping boost Nvidia’s bottom line. The company’s Hopper AI chips are the most in-demand on the market, and the company will begin production of its Blackwell line later this year.

According to Reuters, the company controls 80 to 95 percent of the market for high-performance AI chips. That means every time a company says it’s investing in AI capabilities, there’s a good chance it’s buying up Nvidia’s processors or at least using them.

However, Nvidia’s quarterly report also marks the start of several quarters in which comparing year-over-year revenue growth will be difficult. The company’s second-quarter 2024 revenue was $13.5 billion, up 101% year-over-year. Data center revenue exceeded $10.3 billion, up 141%.

In each successive quarter, the chip giant posted increasingly impressive year-over-year gains. But this party won’t last forever. Last quarter, Nvidia reported revenue of $26 billion, a 262% increase over the $7.19 billion the company reported the previous year.

For the upcoming second-quarter report, Wall Street analysts expect revenue of $28.6 billion, a 112 percent increase from last year. And while that’s still a huge increase in revenue, it’s not as overwhelming as the growth the company has seen in previous quarters. And that could scare off some investors.

But that doesn’t mean that Nvidia won’t continue to make a lot of money or that Wall Street doesn’t approve of the company. As of Thursday, 66 analysts had given Nvidia shares a “buy” rating. Only seven had a “hold” rating and only one of them recommended a “sell.”

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