Nvidia Q4 Earnings Preview: A Make-or-Break Moment for the AI Trade?

• Nvidia is scheduled to release its Q4 earnings report at 4:20PM ET on Wednesday. A call with CEO Jensen Huang is set for 5:00PM ET.
• The chipmaker’s results will serve as a crucial test for both the tech sector and the broader market amid worries over the faltering AI trade.
• A stellar performance could quiet skeptics who fear an AI bubble, while a disappointing report or conservative guidance could serve as a fresh catalyst for a more severe market correction.
• Looking for actionable trade ideas to navigate the current market volatility? Subscribe here to unlock access to InvestingPro’s AI-selected stock winners.

As Nvidia (NASDAQ:) gears up to release its Q4 earnings report after the close on Wednesday, the tech sector and the broader market are on edge. Past earnings surprises from Nvidia have been market-moving events, and this quarter is unlikely to be an exception.

The report arrives at a critical juncture, with the once-unstoppable tech rally showing signs of fatigue amid growing fears that the AI bubble may be on the verge of bursting. The has slumped roughly 6% from recent highs, growth stocks are tumbling, and skepticism is mounting over whether the AI boom can justify sky-high valuations.

Source: Investing.com

As the bellwether of artificial intelligence, Nvidia’s results won’t just reflect its own performance—they’ll signal whether the AI narrative has legs or is unraveling beneath investor’s feet.

Here’s what to expect and what it could mean for investors and beyond.

What to Expect from Nvidia’s Q4 Report

Analysts are forecasting a blockbuster quarter. Profit estimates have been revised upward 33 times in recent weeks, according to an InvestingPro survey, with just five downward revisions, reflecting growing bullishness around Nvidia’s earnings potential.

Source: InvestingPro

Consensus estimates call for revenue at approximately $38.1 billion, a staggering 73% increase year-over-year. This figure edges out Nvidia’s own guidance of $37.5 billion (plus or minus 2%), issued during its Q3 earnings call in November 2024.

Net income is projected to soar to $21.08 billion, up from $12.84 billion in the same quarter last year, while earnings per share (EPS) are expected to hit $0.85, a 63% jump from $0.52 in Q4 FY2024.

These numbers reflect Nvidia’s unrelenting dominance in AI and graphics processing units (GPUs), fueled by robust demand from major tech players like Amazon (NASDAQ:), Microsoft (NASDAQ:), Alphabet (NASDAQ:), and Meta (NASDAQ:), who are collectively pouring over $200 billion into AI infrastructure in 2025.

Beyond the numbers, Nvidia’s forward guidance for the current quarter will be critical. Analysts are projecting revenue of nearly $42 billion, and anything less—or hints of cooling demand—could rattle markets. The company’s track record is impeccable, having beaten estimates in 16 of its last 18 quarters.

However, whispers of emerging competition, notably from China’s DeepSeek, which claims to train competitive AI models with less compute power, have sparked debate about Nvidia’s long-term growth runway.

Investor Scenarios: Preparing for the Aftermath

NVDA stock, trading at $126.63 as of Wednesday morning, has climbed 61% over the past year, outpacing the ’s 17% gain. Shares are sitting right at their 200-day moving average.

Source: Investing.com

With options markets pricing in a roughly 8% swing post-earnings, volatility is all but guaranteed. As such, investors should prepare for multiple outcomes:

1. A Blowout Quarter and Strong Guidance: If Nvidia beats expectations and raises guidance, the stock could surge to a new record above $150, boosting sentiment across the tech sector. That would help lift semiconductor peers like AMD (NASDAQ:) and Broadcom (NASDAQ:), as well as AI software stocks like Palantir (NASDAQ:) and Super Micro Computer (NASDAQ:).

2. An In-Line Report with Conservative Guidance: While Nvidia has a track record of exceeding expectations, conservative guidance could trigger short-term selling. This scenario might signal caution about overestimating the pace of AI adoption.

3. A Miss or Soft Guidance: Given Nvidia’s high valuation, any disappointment could lead to a sharp selloff, impacting not just Nvidia but also other high-growth tech stocks. Investors may consider hedging through options or rotating into defensive sectors of the market.

Those with long-term confidence in Nvidia might use any post-earnings dip as a buying opportunity.

Broader Market Implications

Nvidia’s earnings have evolved into a market-moving event, given its outsized influence on the tech sector and the S&P 500.

A beat-and-raise scenario, particularly with robust Q1 guidance, could reignite investor enthusiasm for AI-related investments, potentially reversing the recent pullback in growth stocks.

Conversely, a miss could ripple through the tech sector, dragging down risk assets and raising questions about the sustainability of the AI-driven rally that has fueled markets since 2023.

Final Thoughts

Nvidia’s earnings will either inject adrenaline into the AI trade or confirm fears of a speculative bubble. For the broader market, the stakes couldn’t be higher. A strong report could salvage the tech rally, while a miss could accelerate the ongoing rotation toward value stocks.

Investors should brace for fireworks and position accordingly.

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Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). I am also long on the Invesco Top QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).

I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.

The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.

Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.