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Nvidia's Earnings Report Looms, Becomes Key Market Barometer

Nvidia's Earnings Report Looms, Becomes Key Market Barometer

新浪财经新浪财经2026/02/25 12:19
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By:新浪财经

Special Topic: Focus on US Stock Q4 2025 Earnings Reports

  At the beginning of 2026, tech stocks had a poor start to trading, due to concerns about the disruptive impact brought by artificial intelligence as well as capital rotating into previously underperforming sectors. However, without the support of this heavyweight sector, the market benchmark will find it difficult to achieve significant gains.

  Nvidia (NVDA) is set to release its quarterly earnings report on Wednesday, becoming the next test for tech stocks. The market is abuzz: Has the AI-related sell-off gone too far? When will the pressured stocks see a turning point? As a semiconductor giant and the world's most valuable company, Nvidia is a bellwether in the AI field. Its financial report and outlook will have a broad transmission effect on the entire industry.

  "AI will continue to reshape the world, but I don’t believe this is the end of the world," said Florida-based Slateton Wealth Partner and Chief Market Strategist Ken Polcari. "Just like every industrial revolution, there is anxiety along the way, but after passing through this stage, new opportunities will emerge."

  Since the beginning of this year, the S&P 500 tech sector has dropped by 3.5%, marking its worst start since 2022—when the Federal Reserve began raising rates, causing a broad market downturn.

  Performance within the sector is highly polarized: software stocks have suffered sharp declines, as the market worries that the new generation of AI tools will severely disrupt their business models.

  So far in 2026, the S&P 500 Software & Services Index has plunged 23%, the worst start to a year on record. Among the biggest losers in software, Intuit, which will release its earnings on Thursday, has fallen about 46% this year; Salesforce, which will report on Wednesday, is down 30% so far this year.

  Despite this, investors have seen some glimmers of hope. Although software stocks had previously been hit by a research report emphasizing AI risks, the sector rebounded slightly on Tuesday after Anthropic announced new tools in partnership with several collaborators.

  Two other subsectors within tech—semiconductors & equipment, and hardware—have risen by 7% and over 4%, respectively, so far this year.

  The performance gap between semiconductor stocks and software stocks has reached an extreme level.

  Nvidia is also the largest market cap company among the "Magnificent Seven" of US stocks, which also includes Alphabet, Apple, Tesla, and others.

  During the current bull market that started in October 2022, these stocks have long been frontrunners, with investors flocking to them because of their high profit growth and competitive advantages.

  "Nvidia’s earnings are crucial, as it is the key hub among the Magnificent Seven," said Chuck Carlson, CEO of Horizon Investment Services in Indiana.

  But in 2026, the overall performance of the "Magnificent Seven" has been weak. Nvidia is the best performer among them, up more than 3%. Among other members, Amazon is down about 10%, Microsoft is down nearly 20%. According to S&P Dow Jones Index data, as of last Friday, Microsoft has been the single largest drag on the S&P 500’s performance this year.

  In addition to concerns about the software sector, Microsoft’s stock price is under another layer of pressure: the market worries that its massive investment in building AI infrastructure may not yield sufficient returns. Amazon, Alphabet, and Meta Platforms face similar capital expenditure concerns.

  As tech stocks struggle, capital is also flowing into other sectors that have long underperformed in this bull market.

  Since tech stocks peaked at the end of last October, the sector has fallen about 10%. During the same period, the materials and energy sectors have both surged more than 20%, and the industrial and consumer staples sectors have also gained more than 10%.

  With the support of these sectors, the S&P 500 benchmark index has remained roughly flat since the end of October, despite the weak performance of tech stocks.

  Even if tech returns are weak this year, it remains the core of major index performance. For example, the tech sector accounts for 33% of the S&P 500’s weight; the second-ranked financial sector among the 11 sectors has only a 12.4% weight.

  This means that even if other sectors perform well, without help from tech stocks, the benchmark index will still struggle to rise significantly.

Editor: Guo Mingyu

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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