Nvidia will release its long-awaited earnings report on Wednesday, which could have a big impact on artificial intelligence (AI) stocks.
The Magnificent Seven, including Nvidia, Microsoft, Tesla, and other tech giants, have fueled market growth since ChatGPT launched in November 2022, but recent challenges have shaken investor confidence. Many now look to Nvidia to restore that confidence or risk pushing the stock market further into decline.
Nvidia’s earnings report could shape the future of AI stocks
Over the past two years, Nvidia has set the bar for the demand for AI chips, pushing a huge stock market rally. As the company releases its highly anticipated earnings report on Wednesday, investors hold their breaths because the results could make or break AI stocks.
The launch of ChatGPT in November 2022 saw investors make massive gains from the AI boom led by a group of tech giants known as “Magnificent Seven,” with the likes of Nvidia, Microsoft, and Tesla taking center stage in boosting the market growth.
However, the group recently stumbled upon a few setbacks threatening their win streak.
China’s DeepSeek launched low-cost AI models for users last month, resulting in dire consequences on Nvidia’s market value, which dropped by more than half a trillion dollars. This all transpired in a single day, and the series of unfortunate events continued when an analyst reported that Microsoft was canceling some of its data center leases.
The Magnificent Seven stocks have dropped from their highlights in late 2024 and are currently seeping into correction territory. The Roundhill Magnificent Seven ETF has fallen more than 11% since its December 17 peak.
Nvidia must reassure investors amid market volatility
Nvidia has surpassed analyst expectations over the past two years, which has eased investor concerns about the huge expenditure on advancing AI. However, investors’ moods are unstable as the company’s growth is slower than in previous years, with a lower impact on its stock price in the final two quarters.
Swissquote Bank’s market analyst Ipek Ozkardeskaya stated that Nvidia has been burdened with the task of uplifting the market mood this week, but if it fails, the stock selloff could quicken.
“Hopes rest on Nvidia’s shoulders,” Ipek commented.
On Wednesday, Nvidia’s stock climbed 3.3%, boosting the broader U.S. stock market and the chip sector after a downturn caused by a weak consumer confidence report.
Since ChatGPT’s debut in November 2022, the Magnificent Seven stocks have gained a market value of about $11 trillion, with Nvidia reaping the most benefits. The company has added a market value of about $2.7 trillion, making it the top beneficiary of Wall Street’s AI investment plan.
Nvidia’s stock has skyrocketed by about 1,800% over the past five years, putting it on top of the Magnificent Seven charts. On average, the group’s stocks have more than tripled, while the S&P 500 gained about 65%.
In 2025, however, these stocks plummeted. The Magnificent Seven is down 4.5%, while the rest of the S&P 500 gained 4.4%. This may seem like a big improvement, but the entire index is only a 1% increase.
Options statistics suggest Nvidia’s stock could swing 9.0% in either direction after the company announces its earnings report. This figure is slightly higher than the average move of about 7.6% over the last 12 quarters. Despite Nvidia’s rapid rise, its stock is still trading at a lower valuation of 28 times expected earnings, a drop from 36 a year ago and a peak above 80 around June 2023, according to LSEG data.
Yes, DeepSeek did shake investors, but according to Susannah Streeter, head of money and markets at Hargreaves Lansdown, Nvidia’s first-mover advantage and the massive infrastructure investment plans from tech influencers like Meta will keep the company’s advanced chips in demand.
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