After Powell's "bombshell", the market enters "NVIDIA time"

At the end of August, leaders in the financial and technology sectors took turns making waves! Following Powell's dovish speech, Wall Street's attention will now be focused on NVIDIA.

Next Wednesday, this AI chip giant will release its highly anticipated financial report. Wedbush analyst Dan Ives has called it "the most important tech earnings in years."

"We believe that next week will be the most important week in the stock market this year, and possibly the most important week on Wall Street in years, as AI pioneer Jensen Huang is about to release NVIDIA's second-quarter earnings," Ives said.

NVIDIA's report not only concerns itself, but also the entire global technology and financial industry chain. S&P Global Market Intelligence expects NVIDIA's latest quarter revenue growth to slow to 113%, with revenue rising to $28.7 billion.

Investors' enthusiasm for the AI boom may be cooling off

In the AI chip market, NVIDIA has always been in a leading position with its outstanding performance. Giants like Alphabet, Microsoft, and Meta continue to favor NVIDIA chips. They spare no expense to compete for the commanding heights in the AI field, aiming to train more powerful and intelligent AI models.

Nevertheless, investors still have doubts. Questions have begun to arise: "AI is overhyped," "large tech companies are overvalued," "the market's demand for AI is too optimistic"... Especially for NVIDIA, despite its stock price soaring by 168% since the beginning of this year, according to Koyfin data, the stock peaked at around $135 in mid-June and has since remained at a slightly lower level.

Furthermore, investors' enthusiasm for the AI boom may be cooling off, as reflected in the slowing growth of NVIDIA's revenue. The company has experienced a roller-coaster ride in its financial reports: revenue declined by 13% year-on-year in the first quarter of the 2024 fiscal year, and then surged by 265% in the fourth quarter of the same year.

S&P Global Market Intelligence expects this rapid growth to be unsustainable. The second-quarter data for 2025 to be announced next week is expected to show revenue growth slowing to 113%, with revenue rising to $28.7 billion. At the same time, revenue for the quarter in July next year is expected to reach $40 billion, with an increase of only 40%.

Is a $3 trillion market value the beginning of a historic moment?

Despite market volatility causing concerns for investors, Ives emphasizes that current technological developments still have long-term value. He stated,

We are at the beginning of a historical moment similar to the internet in 1995, rather than the bubble period of 1999.

He added that for every $1 spent on NVIDIA's GPU, the tech industry can generate an additional $8 to $10 in revenue.

Currently, NVIDIA's market value has reached $3 trillion. The average component stock of the S&P 500 index is only $990 billion, with the median stock at $360 billion The value of NVIDIA alone exceeds the entire stock market of all countries in the world except China, the UK, India, and Japan.

The market is holding its breath, waiting for the financial report data of this AI giant