With Nvidia, the bellwether of artificial intelligence (AI), set to report earnings on the 25th local time, skepticism is spreading in the market that even a record card may not be enough to lift its stagnating share price.
On the 20th at the New York Stock Exchange (NYSE), Nvidia finished the session up 1.02% at $189.82. Over the past few years, Nvidia has played a pivotal role in driving the U.S. stock market to a record high. From the end of 2022 to the end of last year, Nvidia's share price skyrocketed more than 1,500%. However, after hitting a record high of $212.19 in October last year and then slipping slightly, Nvidia shares have been moving sideways in the $180 range to date. Since the start of the fourth quarter through now, Nvidia's share price has risen just 1.7%, a lackluster performance compared with the 3.3% gain in the Standard & Poor's (S&P) 500 over the same period.
Major foreign outlets including Bloomberg evaluated this as suggesting that market expectations for Nvidia have already hit the ceiling. Wall Street expects Nvidia's fourth-quarter revenue to surge more than 60% year over year to about $65.9 billion (about 95.2123 trillion won), but experts note that this figure is already priced into the stock. Some analyses say investors now want not just an "earnings surprise" but an overwhelming result that defies imagination. Solid results may instead be seen as "the end of the story."
Bloomberg said, "As skepticism over AI raises its head, Wall Street sees Nvidia's share price coming under greater pressure regardless of the upcoming earnings results." The company has fallen into a "trap of expectations," where it must not only post strong numbers but overwhelmingly beat the market's hopes. Rhys Williams, chief strategist at Wave Capital Management, warned, "This earnings release is a major watershed that will determine the direction ahead, but with the bar so high, if results are not strong enough, it could actually trigger a decline in the share price." Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management, said, "Nvidia's fundamentals remain strong, but the question is whether investor sentiment supporting that story can stay hot."
Nvidia Chief Executive Officer Jensen Huang's next-generation AI chip "Blackwell," which he said has "insane demand," is also proving a double-edged sword. Investors have begun to focus more on potential supply chain bottlenecks in production and the resulting margin compression than on Blackwell's explosive demand. In the past, they looked only at the pace of growth; now they are closely scrutinizing the sustainability of profitability. Bloomberg assessed, "For Nvidia's share price to take off again, it will need to provide firm assurance that far exceeds market expectations in both the smooth supply of Blackwell and the next earnings outlook (guidance)."
External conditions are also tough. As tariff threats from the Trump administration and trade tensions with Europe intensify, concerns are growing that big tech corporations' AI capital spending sentiment could weaken. This is acting as a strong resistance line capping Nvidia's share price.