Nvidia's upcoming earnings report puts AI trade to the test

Analysts project $92 billion in quarterly sales

Nvidia is set to report second-quarter earnings Wednesday, with analysts projecting record sales of $92 billion, up from a forecast of $78 billion at the start of 2026. The chip maker’s outlook for semiconductor demand is expected to heavily influence the tech sector and the broader stock market, as investors look to the report for confirmation that the artificial-intelligence boom is still accelerating.

The report arrives against a backdrop of growing political pushback to AI, a bond selloff that has pushed borrowing costs to their highest levels in years, and signs of strain among some of Nvidia’s largest customers. OpenAI recently told investors its revenue rose 18% in the second quarter while losses deepened, and the hyperscalers that include some of Nvidia’s key customers — once cash-printing machines — are relying more on debt, according to The Wall Street Journal.

Nvidia, described in the Journal’s reporting as a $5 trillion chip maker, has provided the key building blocks for AI since the launch of ChatGPT in 2022 set off a race for dominance among OpenAI, Anthropic and established Silicon Valley giants. The company has smashed analysts’ earnings estimates for each of the 14 quarters since the AI boom kicked into high gear, the Journal reported. Nvidia posted 210% annual growth in net income in its last three-month period, according to FactSet, making Wall Street’s 126% projection look pedestrian.

To beat the current second-quarter target, Nvidia will have to outrun 95% annual earnings growth to more than $51.5 billion, per the Journal’s reporting. Expectations for a blowout quarter have risen rapidly over the course of 2026, with the consensus sales projection climbing from $78 billion at the start of the year.

Nvidia is increasingly stepping in to shore up potential weak points across the market. Earlier this month, the company teamed up with six of Wall Street’s biggest firms on a $500 billion AI-financing plan, pledging to backstop lending to customers that can’t afford its chips otherwise. The chip maker last week also took a stake in Cloverleaf Infrastructure, which arranges power for data centers, and struck a $6 billion deal with startup Poolside aimed at developing a powerful open-weight AI model.

Wall Street is hoping Nvidia can beat expectations again. Brian Mulberry, chief market strategist at Zacks Investment Management, told the Journal: “It’s kind of becoming more and more like the World Cup final than the Super Bowl at this point. It’s just gotten to be that big.”

Investors have kept pumping money into the AI trade despite concerns about chip consumers — and to the benefit of chip producers. Nvidia’s outlook for semiconductor demand could send ripples through counterparts such as Micron Technology and Sandisk, developers of the data centers in which their chips reside, and a supply chain of power producers, contractors and other specialists that underpin the globe-spanning AI build-out.

“We joke internally that we’re all Nvidia analysts now,” David Lefkowitz, head of U.S. equities at UBS Global Wealth Management, told the Journal.

The irony, the Journal noted, is that investors have tended to sell Nvidia stock immediately after blockbuster earnings, with shares falling each trading session after its four past quarterly reports. Some are betting that pattern will repeat. The options market is pricing in a 5.3% swing, higher or lower, in Nvidia shares during the session following earnings, according to Option Research & Technology Services — higher than the 4.8% average move after the company reports quarterly results over the last 12 months. In recent days, some of the most actively traded Nvidia options have been put contracts tied to the stock falling from its Friday value of $214.75 to $205 and $210 apiece, according to Cboe Global Markets data.

Many analysts remain optimistic. Frank Lee, global head of tech hardware and semiconductor research at HSBC Global Investment Research, recently raised his price target for Nvidia shares to $360 from $325, citing the company’s strategic partnerships with suppliers and its role as a top contributor to open-source AI.

The earnings come amid broader turbulence in tech-adjacent markets. In July, big-tech earnings sparked volatility, with concerns about runaway capital spending driving an $890 billion wipeout after Alphabet’s and Tesla’s results and contributing to the unwind of hedge fund Situational Awareness, the Journal reported. Microsoft posted the largest one-day gain in market capitalization by any company after a quarter proving it could still show investors the money. SpaceX rocketed higher after a record-breaking initial public offering, only to see $1 trillion in value evaporate.

Surging memory prices and borrowing costs have fueled fears that those and other companies will be unable to keep plowing more money into supplies including Nvidia chips. Shaia Hosseinzadeh, founder of OnyxPoint Global Management, told the Journal he has recently bought dips in AI-infrastructure stocks when Wall Street has strained to absorb massive debt issued by Silicon Valley.

“The macro data is really quite robust,” Hosseinzadeh said. “Of course, there’s a level at which everything breaks.”