Nvidia Earnings Set to Spark Up to 6% Stock Swing

Nvidia's earnings report is set for Wednesday afternoon, and traders are bracing themselves for a potential 6% swing in the stock's price by week's end. Analysts expect the company to post significant gains, with sales and profits roughly doubling from last year.

The AI chip leader's data center segment is expected to drive much of this growth, with $85.67 billion in projected revenue, an 108% increase from a year ago. This has some investors worried about the sustainability of spending on America's AI buildout, fueling concerns about an AI bubble.

Nvidia shares have already climbed 16% since the start of the year, but are still down around 8% from their May highs. Morgan Stanley analysts caution that quarterly reports have often been a sell-the-news event for Nvidia, and investor attention may focus on the company's defense of its market share in the face of growing competition.

Despite these concerns, analysts remain overwhelmingly bullish on Nvidia stock, with all but one of the 13 tracked by Visible Alpha recommending a buy. Their mean target price suggests more than 35% upside from Thursday's close.