Catenaa, Wednesday, May 20, 2026- Wall Street is waiting for the World’s most valuable company, Nvidia, to report its first-quarter earnings after the bell on Wednesday, which would confirm or deny the AI boom.
Wall Street is expecting the latest in a series of strong prints from chipmakers as Big Tech continues to shower the companies with cash to build out AI infrastructure. So investors will be looking for indications about what the growth outlook is from here.
A disappointment, however, could give credence to investors’ fears that the group has gotten overextended.
The Philadelphia Stock Exchange Semiconductor Index has soared more than 60% this year, but it tumbled 6.4% over Friday and Monday as inflation concerns weighed on the stocks.
Nvidia shares are up slightly in trading on Wednesday, extending gains to 20% in 2026 and more than 35% since hitting a recent low in late March, but they lost 6.4% in three sessions through Tuesday’s close. They’re still outperforming the technology-heavy Nasdaq 100 Index, which has gained 15% this year.
The stock was up 1.8% Wednesday. It has declined the day after Nvidia’s last three earnings reports, even though the company posted solid results. The options market is pricing in a 5.5% move in either direction in the wake of this report.
Despite its relatively underwhelming performance in 2026, Nvidia remains the biggest stock in the market, accounting for almost a fifth of the S&P 500 Index’s more than 7% advance this year.
Four other chipmakers, Micron Technology, Broadcom Inc., Advanced Micro Devices, and Intel, are among the seven largest point contributors to the S&P 500’s rise in 2026, a level of leadership rarely seen from this cyclical industry.
Investors certainly have plenty of reasons for optimism in an economy soaked with AI cash. The four biggest spenders, Amazon, Alphabet, Microsoft, and Meta Platforms, are planning as much as $725 billion in capital expenditures this year and significantly more in 2027.
Chips are a huge part of that spending, and Nvidia retains a commanding share of the market for AI accelerators.
The growth is coming so quickly that the stock has started to look cheap. Consensus estimates for Nvidia’s net income in fiscal 2027, which ends in January, have risen by 13% over the past three months, while the view for revenue has climbed 12%, according to data compiled by Bloomberg.
As a result of those increased expectations, the shares now trade at less than 24 times estimated earnings, well below their 10-year average of roughly 36.
This earnings season has seen several blowout reports from chipmakers, with Intel, AMD, Texas Instruments, NXP Semiconductors NV, and Silicon Motion Technology all posting double-digit rallies in the wake of their results.
So far this season, 93% of chipmakers have topped earnings expectations, with an upside surprise of nearly 25%, compared with a 6.6% upside surprise last quarter, according to data compiled by Bloomberg.
