Nvidia's Shocking Software Reports: Will This Trigger a Stock Market Collapse? Find Out Now!

By Lewis Krauskopf

NEW YORK, Feb 20 (Reuters) – Investors are eagerly awaiting the financial results from Nvidia Corp, a prominent player in the artificial intelligence sector, as they explore avenues to stabilize a U.S. stock market that has recently faced turbulence due to AI-related concerns. Nvidia’s report, set for Wednesday, comes at a crucial time as the tech sector—particularly heavyweight stocks—has had a rocky start in 2026, impacting major indexes that these companies have historically buoyed.

Alongside Nvidia, Wall Street's attention will also be directed toward quarterly reports from other significant tech firms, especially in the software domain, which are reeling from fears that AI advancements might disrupt their business models. Marta Norton, chief investment strategist at Empower, noted that AI “hyperscalers” are ramping up capital investments in data centers and related infrastructure, much of which relies on Nvidia's technology. This could set the stage for Nvidia to report robust earnings. “The expectation for outsized results for Nvidia has been a persistent theme over the past few years,” she added. “And so it’s hard for Nvidia to surprise when everyone expects it to surprise.”

Currently, the benchmark S&P 500 index is up a modest 0.2% for the year, yet beneath the surface, significant fluctuations have been evident. Shares in sectors such as software, wealth management, and real estate services have suffered due to fears about their vulnerability to AI disruption.

Nvidia, boasting the title of the world's largest company by market capitalization, has seen its stock surge more than 1,500% from late 2022 through the end of 2025. However, as of Thursday, its stock has only increased about 0.8% in 2026. In contrast, other members of the so-called “Magnificent Seven” megacap stocks, instrumental to the current bull market, have faced steeper declines, with Microsoft down more than 17% and Amazon off 11% this year.

The significance of Nvidia’s stock is underscored by its 7.8% weighting in the S&P 500, meaning its performance can heavily influence the index. Analysts predict that for its fiscal fourth quarter, Nvidia is expected to announce a remarkable 71% increase in earnings per share, amounting to a revenue forecast of $65.9 billion. Furthermore, projections for the upcoming fiscal year suggest earnings per share could rise by 66% to an average of $7.76. However, the range of estimates varies notably, with the lowest at $6.28 and the highest at $9.68, as noted by Melissa Otto, head of research at S&P Global Visible Alpha.

“If the bulls are right, then the stock is looking probably not too expensive,” Otto said. “If the bears are right…it’s not that cheap.” The upcoming quarterly conference call with Nvidia’s CEO Jensen Huang could also yield insights that have broader implications for the AI industry, particularly concerning hyperscalers. Nick Giorgi, chief equity strategist at Alpine Macro, emphasized the necessity for Huang to express confidence in Nvidia's customers. “The fact that to this point, Nvidia has been a cheerleader for their biggest customers is actually what you should want as an investor in this whole ecosystem,” he noted.

In addition to Nvidia, reports from major software firms like Salesforce and Intuit will carry additional weight given the ongoing AI fallout in the industry. The S&P 500 software and services index is down approximately 20% for the year. King Lip, chief strategist at BakerAvenue Wealth Management, remarked on the importance of the upcoming week for software, pointing out that while the selling might seem “overdone,” certain software companies will need to innovate to survive.

Other notable earnings reports are expected from AI infrastructure players such as Dell and CoreWeave. Meanwhile, outside of the tech realm, major retailers including Home Depot and Lowe’s will also report their results as the fourth-quarter earnings season nears its end. Investors will also be keen to hear content from former President Donald Trump during his State of the Union address on Tuesday.

Despite the struggles faced by the tech sector, other market segments, including energy, industrials, and consumer staples, have provided support to the indexes. Norton encapsulated the current market sentiment succinctly: “It’s kind of a perplexing market. Everything that worked in 2025 is now having a hard 2026. And what was left behind in 2025 is working in 2026.”