GRAPHIC: Nvidia’s growing sway over U.S. stock market
By Lewis Krauskopf and Noel Randewich
NEW YORK (Reuters) — No single stock has embodied the U.S. market’s artificial intelligence fervor as much as Nvidia Corp (NASDAQ:NVDA), leaving Wall Street tied to the fluctuations of its volatile shares.
The semiconductor company, whose chips are considered the gold standard in the AI industry, forecast fiscal first-quarter revenue above estimates after the market closed on Wednesday in one of the most highly anticipated earnings releases in recent memory.
Given the company’s status as a bellwether of the AI industry and its heavy weighting in U.S. indexes, the way investors react to its earnings report in coming days could offer a glimpse of whether risk appetite continues to thrive in a stock market that has cruised to record highs despite climbing Treasury yields and fading hopes that the Federal Reserve will begin cutting rates in coming months.
“The response to the numbers could be seen as a referendum on the market itself,” said Paul Marino, chief revenue officer at GraniteShares, which manages exchange traded funds tied to Nvidia’s performance. “If Nvidia beats expectations and the stock still falls, that will tell us that people are anxious.”
Nvidia shares tripled in 2023 and are up nearly 40% this year on growing excitement over the business potential of artificial intelligence. That’s made it a standout performer among the so-called Magnificent Seven group of growth and technology stocks that have been the market’s key drivers over the past year.
Nvidia eclipsed the $1 trillion mark for market capitalization in the middle of last year. Earlier this month, it passed Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) to become the third-largest U.S. company by market
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