Louis Krauskopf
NEW YORK — Investors are eyeing next week’s results from artificial intelligence (AI) leader Nvidia to stabilize a U.S. stock market reeling from AI-related concerns and digesting the Supreme Court’s overturn of President Donald Trump’s sweeping trade tariffs.
Friday’s Supreme Court ruling invalidating President Trump’s tariffs initially sent stock prices and bond yields higher, but left investors grappling with uncertainty about what other forms of trade tariffs the president will resort to and how the U.S. government will deal with lawsuits and refunds.
In addition to the excessive focus on the market and Nvidia’s performance, Wall Street will also be focused on quarterly reports from other technology sectors. This includes software companies that are facing concerns that AI will transform their businesses.
mega cap stocks
The report released Wednesday by Nvidia, the world’s largest semiconductor giant by market capitalization, comes as the heavily weighted tech sector and other mega-cap stocks are off to a shaky start to 2026, weighing on the major indexes that have driven gains for the past few years. AI “hyperscalers” have announced plans to increase capital spending to build data centers and other infrastructure, often using Nvidia equipment, setting the company up for strong results, said Marta Norton, chief investment strategist at retirement and wealth services provider Empower.
“Expectations for extraordinary results from NVIDIA have been a persistent theme for several years,” said Norton. “So it’s hard for NVIDIA to surprise when everyone is expecting it.”
The benchmark S&P 500 ended the year up a modest 0.2%. But beneath the surface, a major revolution is occurring. Stock prices in industries such as software, asset management and real estate services have fallen on concerns that they are vulnerable to disruption from AI.
Magnificent Seven
Nvidia’s stock price soared more than 1,500% from the end of 2022 to the end of last year. As of Thursday, the stock was up about 0.8% this year in 2026. Other megacap stocks in the Magnificent Seven that have been driving the current bull market have fared worse this year. Microsoft stock is down more than 17% in 2026, and Amazon is down 11%.
Nvidia’s stock price alone could impact major indexes. For example, this stock has a weight of 7.8% in the S&P 500.
The company’s fourth-quarter results are expected to result in a 71% increase in earnings per share and revenue of $65.9 billion, according to LSEG. Analysts’ average forecast for next year is for earnings per share to rise 66% to $7.76. But Melissa Otto, head of research at S&P Global Visible Alpha, said the range of expectations among analysts is “quite wide.” The low end calls for fiscal year earnings per share to be $6.28, while the high end is expected to come in at $9.68, according to LSEG data.
“If the bulls are right, the stock probably doesn’t look that expensive,” Otto said. “If Bear is right… it’s not that cheap.”
Nvidia CEO Jensen Huang’s comments on the company’s quarterly conference call could have broader implications for the AI industry, including hyperscalers whose stock prices have been weighed down by concerns about a lack of return on capital spending.
“Jensen has to come out and demonstrate confidence in his clients,” said Nick Giorgi, chief equity strategist at Alpine Macro. “The fact that Nvidia has historically been our biggest customer cheerleader is actually what you want as an investor in this entire ecosystem.”
software player
Given the impact of AI on the industry, reports from major software players Salesforce and Intuit will be more important than usual. The S&P 500 Software and Services Index is down about 20% since the beginning of the year.
“Next week is going to be a pretty big week for software,” said King Ripp, chief strategist at Baker Avenue Wealth Management. Mr Lipp said the group’s overall sale seemed “overdone”. “I think there are some software names…we’re going to have to find ways to adapt and innovate.”
“Complex market”
AI infrastructure companies Dell and CoreWeave are also scheduled to report earnings this week. Outside of tech, retailers Home Depot and Lowe’s are scheduled to report results as the fourth-quarter earnings season draws to a close. Investors will also evaluate Trump’s State of the Union address on Tuesday.
While the tech sector has struggled, market rotation into areas such as energy, industrial products and consumer staples has supported the index.
“This is a complex market in some ways,” Norton said. “Everything that goes well in 2025 will go through difficulties in 2026. And what remains in 2025 will go well in 2026.”
