Here's Why Nvidia Earnings Still Matter to the Stock Market
While Nvidia may not move the S&P 500 like it once did, its earnings Wednesday might still move markets.
Tech giant Nvidia Corp.’s (NVDA) pull on the stock market isn’t quite as strong as it was last year. Fears over China’s DeepSeek AI model and what it means for the demand for Nvidia’s powerful AI chips pushed shares of the semiconductor giant down by more than 20% in a matter of days in January.
But that slide in Nvidia barely registered in the SPDR S&P 500 ETF Trust (SPY), which dropped less than 2% from its all-time highs while the ETF’s biggest component was tumbling.
Though no longer the biggest company by market capitalization—Apple Inc. (AAPL) has reclaimed the top spot—Nvidia still matters for the stock market. At 6.5%, the AI chipmaker is a substantial weighting in SPY and other S&P 500-tracking ETFs—more than any other stock besides Apple.
And what happens to Nvidia has consequences far beyond just the company’s stock. From other companies in the semiconductor industry to tech giants that are big customers of Nvidia, its performance can send ripple effects throughout the entire market.
NVDA's Q4 Earnings
That’s why Nvidia’s latest fourth-quarter earnings report, to be reported after the bell Wednesday, will still be a notable catalyst for the stock market this week. Analysts anticipate another beat-and-raise quarter for the firm, but there is a lot of uncertainty regarding how much Nvidia will outperform expectations.
After reporting results for the third quarter in November, Nvidia’s stock finished the day fractionally higher (though the stock proceeded to fall 7% in the following days). When the company reported its second-quarter results in August, Nvidia’s stock dropped more than 6%.
Nvidia’s last big positive reaction to earnings was Q1 2024, when the stock popped more than 9%.
The bulls are hoping that Nvidia can bring some of that magic back. The stock has largely been rangebound since June as investors weigh the AI boom against concerns that growth may be slowing, margins could be under pressure, and that the AI hype has already been priced in.
To find ETFs with the largest positions in Nvidia, check out etf.com’s Stock Holdings tool.
