The stock market is riding an AI wave and has been for quite some time, but the question is whether that wave has enough force to keep pushing higher — or if it’s about to crash.
Nvidia (NVDA), the undisputed AI leader, is at the center of it all. With its earnings report coming up on Feb. 26, the entire market is watching to see if the stock continues to justify its meteoric rise.
With AI being the dominant theme in markets for the past year, every major company is mentioning it on earnings calls, whether it actually impacts their business or not.
That alone tells you where the money is flowing — straight into anything that can slap “AI” onto a press release to catch investors’ attention.
Nvidia has been the biggest beneficiary, with its market cap now second only to Apple (AAPL). It has single-handedly lifted the Information Technology sector (XLK), and its earnings will set the tone for whether the AI-fueled rally continues.
If Nvidia crushes expectations, the market could rally further. But if there’s even a slight crack in its outlook, it could trigger a wave of selling.
High Expectations and a Heavyweight Market Impact
The stakes are massive…
Nvidia has the potential to move markets more than most macroeconomic events. Just last week, CPI inflation data came in hotter than expected, but stocks barely flinched. Meanwhile, Nvidia’s last major drop — on concerns about China’s AI restrictions — erased $500 billion in market cap in a single day.
That’s the level of influence Nvidia has.
Right now, the stock is sitting near all-time highs, but there’s a growing risk of a pullback. It’s already seen a historic run, and expectations are sky-high.
There’s no denying that AI is a transformative technology, but the hype cycle doesn’t always match reality. AI isn’t going to create more jobs — it’s going to replace them. The companies integrating AI successfully will boost efficiency and profits, but the broader economy could struggle as automation displaces workers.
That’s a longer-term issue, but it’s something investors should keep in mind. AI could be a tailwind for some stocks in the short term, but the economic consequences may take years to materialize.
Nvidia’s Earnings Will Dictate the Next Market Move
The bottom line is simple: Nvidia’s earnings could either fuel another leg higher for stocks, or serve as the catalyst for a major pullback.
Either way, investors need to be ready.
If Nvidia posts strong numbers and delivers a bullish outlook, it could send the Nasdaq 100 (QQQ) to new highs. But if the results disappoint, Nvidia could see a sharp correction — potentially dragging the entire market with it.
Either way, AI’s influence isn’t fading anytime soon.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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