Why Nvidia earnings must deliver massively

This is a red-hot market that needs Nvidia (NVDA) to have a huge earnings day on Wednesday evening.

Or else.

Nvidia is the straw that stirs the market’s drink: Sure, the main AI stories that have captivated investor minds this year include Intel (INTC) showing signs of life and stock explosions at SanDisk (SNDK) and Micron (MU) because of memory chip shortages.

But the reality is that Nvidia remains the main driver of the broader market due to its outright size.

Nvidia accounts for a leading 9% of the S&P 500's (^GSPC) market cap weight, according to data from Goldman Sachs strategist Ben Snider. The stock has contributed 20% of the aggregate S&P 500's year-to-date return.

Shares are up 21% year to date, outperforming the S&P 500’s 7% advance.

Alphabet (GOOG, GOOGL) is second on the contribution front, and the aforementioned Micron is a distant third.

Stocks at a glance: AI optimism — in large part powered by strong demand signals from Nvidia customers— has lifted the S&P 500’s return to 10% year to date. Technology has accounted for 85% of the benchmark index’s return. The S&P 500 excluding technology has returned just 3%.

“With AI and momentum [stocks] moving hand in hand and driving the direction of the S&P 500, many investors have expressed the view that the equity market today is one big trade rather than a market of stocks,” Snider said.

Wall Street chatter on Nvidia ahead of earnings: All indications suggest Nvidia will have a strong earnings day this week. Hyperscalers such as Microsoft (MSFT) and Meta (META) have aggressively lifted their 2026 capital expenditure plans. Taiwan Semiconductor (TSM) has put up impressive results, and Intel looks to be close to getting foundry business from Apple (AAPL) at long last.

Yahoo Finance data shows analyst profit estimates on Nvidia have risen for this year and next over the past 60 days. Price targets on the stock have also maintained an upward bias.

“We expect a beat-and-raise quarter given positive industry supply and demand datapoints but believe the bar for stock outperformance is relatively high heading into the print,” Goldman Sachs analyst James Schneider said in a note.

“Although the stock has lagged peers and now trades at a meaningful discount relative to history, we believe the stock’s multiple can re-rate if we see evidence of: (1) improving profitability metrics at hyperscalers that supports sustained spending growth; (2) proliferation of agentic AI signaling broader enterprise adoption; (3) more visibility into deployments at non-traditional customers,” Scheider added.