Why Nvidia Earnings Matter More To Markets Than What The Fed Chair Says

Why is Nvidia’s upcoming earnings report drawing more attention than the Federal Reserve Chair’s speech? The answer lies in growing investor anxiety over the actual returns from massive corporate investments in artificial intelligence. While Powell’s comments are anticipated, they’re unlikely to bring major surprises. In contrast, Nvidia’s results could confirm or dispel fears that the AI boom is built on hype rather than real value.

Market watchers expect Powell to emphasize economic stability—low unemployment hovering just above 4%—and caution against rate cuts due to inflation risks from tariffs. As The New York Times noted, the main labor market concern remains a potential sharp drop in monthly job growth. But given Powell’s track record of independence from political pressure, including resistance to former President Donald Trump’s push for lower rates, his message is likely to be measured and predictable.

Nvidia, however, stands in a different league of market influence.

Why Nvidia Moves Markets More Than the Fed

Since its explosive revenue forecast in May 2023—a moment that inspired my book Brain Rush—Nvidia has evolved into a market powerhouse. Its market cap now exceeds $4 trillion, representing 8% of the S&P 500’s total value, per The Times. That means movements in Nvidia’s stock have an outsized impact on the broader index.

Even the options market sees Nvidia’s report as more consequential than Powell’s address. According to The Times, S&P 500 options anticipate a 0.8% market swing following the Fed Chair’s speech. But for August 28—the first full trading day after Nvidia’s report—options are pricing in a 0.9% market move, signaling higher expected volatility from the tech giant’s results.

What the Market Expects From Nvidia’s Q2 Report

Investor sentiment toward AI stocks has cooled in recent weeks. Take Palantir: despite strong financials, its shares dropped 20% from a peak of $190 after a short seller claimed the stock was 74% overvalued, as I detailed in a Forbes article on August 20.

The core concern? Most companies aren’t seeing tangible returns from their AI spending.

Back in September, I questioned whether generative AI had any real-world breakthroughs. While tools like ChatGPT were useful for drafting emails, there was no “killer app” — nothing like the iTunes store for the iPod or spreadsheets for PCs, as I wrote in the Boston Globe.

Now, MIT has put numbers behind that skepticism.

A study from MIT’s NANDA Institute, highlighted by SeekingAlpha, found that despite $30–$40 billion in enterprise investment, 95% of organizations see zero return from generative AI. The data comes from 150 expert interviews, a survey of 350 employees, and analysis of 300 public AI deployments.

With such bleak findings, investors are on edge. If Nvidia delivers a cautious outlook, it could confirm fears that the AI investment wave is underperforming — and trigger a broad sell-off in tech.

So what do investors want to hear next Wednesday?

In May, Nvidia projected $45 billion in Q2 revenue — slightly below expectations but still a 50% year-over-year jump, according to Investor’s Business Daily. Now, the bar has risen.

Analysts surveyed by MarketBeat expect $45.65 billion in revenue — a 52.4% increase annually — and earnings per share of $1.00, up 47%. More importantly, The Motley Fool reports that Wall Street is looking for Q3 2026 revenue guidance of $52.5 billion.

If Nvidia beats those numbers and raises its forecast, its stock could surge — lifting the entire AI sector. But if it falters, the fallout could ripple across tech, dragging down everything from cloud providers to AI startups.

Meanwhile, Powell’s speech, while important, will likely prompt little more than a shrug from markets already pricing in his stance.

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