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Tonight, after the closing bell, one company will report its quarterly earnings. And depending on what it says, your 401(k) could move by a full percentage point before you wake up tomorrow.
That company is Nvidia. It makes the chips that power almost every major AI system on the planet. Its market cap — $5.4 trillion as of yesterday — is larger than the entire annual economic output of Germany. Bigger than Japan. Bigger than the UK, India, and France.
Let that sit for a second. A company that employs 36,000 people is worth more than countries with hundreds of millions of citizens.
Now here’s what most people get wrong. They think this is just a “tech stock” story. It isn’t. Nvidia now makes up roughly 8% of the S&P 500. One analyst estimated it drives as much as 50% of the index’s performance. So when Nvidia reports earnings... it’s not just Nvidia moving. It’s your index fund. Your target-date retirement fund. Your “diversified” portfolio.
Wall Street expects revenue around $43 billion for the quarter — up 80% from a year ago. They expect earnings to more than double. Those are staggering numbers. But here’s the catch: the stock is already priced for staggering. Anything less than amazing could send it lower. And when a stock this big drops, you feel it even if you’ve never bought a single share of Nvidia in your life.
The four biggest cloud companies — Alphabet, Amazon, Microsoft, and Meta — plan to spend $725 billion on AI infrastructure this year. That’s up 77% from last year. Most of that money flows straight to Nvidia. The question is whether that spending keeps growing... or starts to slow.
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