Editor's note: One corporate titan is close to sharing its first-quarter earnings...
And what happens next will impact the broader market, for better or worse. In today's Masters Series, originally published in the April 23 issue of the free Chaikin PowerFeed e-letter, Vic Lederman, publisher for our corporate affiliate Chaikin Analytics, explains why you should be watching this company whether you own its shares or not...
Keep the World's Biggest Company on Your Radar This Month
We're less than a month out from a big day for the markets...
May 21 is shaping up to be a blockbuster day for investors. That's because the biggest company on the stock market is set to report earnings the evening before.
I'm talking about Nvidia (NVDA), of course.
The semiconductor giant plans to report first-quarter earnings for its 2027 fiscal year after the markets close on May 20.
If Nvidia's past earnings are any sign of what's to come, we could see a big swing in the markets the next day.
As I said, we're still about several weeks away from this massive event. But it's important to keep this on your radar.
Investors across the market will surely dive deep into the company's report. They'll be searching for any sign, real or imagined, that the AI megatrend will continue...
Or that it will soon come to a screeching halt.
Now, I'm not going to speculate about the exact numbers Nvidia will report. I don't have a crystal ball.
Keep in mind that in its past three quarterly reports, Nvidia blew away revenue expectations. The company's most recent report boasted quarter-over-quarter revenue growth of 20% – and year-over-year growth of 73%.
Early in March, my colleague Ethan Goldman also discussed that earnings report. As he said...
Under normal circumstances, growth like that would send a stock soaring. But for the largest company on the stock market, the opposite happened...
Nvidia grew quickly in after-hours trading. But by the time the markets opened [the next day], the stock gave those gains back.
And it ended the day down more than 5% from its pre-earnings share price.
Ethan also noted that Nvidia had been facing a few headwinds going into the report release.
In short, Nvidia had struggled with weak relative strength versus the S&P 500 Index. And support for the stock from the "smart money" on Wall Street had been lagging. The Power Gauge noted these issues.
There was also a concerning trend with other tech giants. As Ethan noted in his March essay...
We all saw other tech giants in the field report massive earnings beats – only to have their stocks pummeled by weary investors.
But now, just weeks away from Nvidia's next earnings release, the picture in the Power Gauge has changed – at least for the time being...
As I said, the Power Gauge flagged Nvidia's struggles earlier this year...
Again, the smart money took a cautious view. And the stock's relative strength was struggling.
"Under the hood," the Power Gauge still saw some strong points. But with the stock largely staying below its long-term trend line, our system held Nvidia's rating at "neutral+" for quite some time.
Remember, a "neutral+" rating isn't bad. It simply meant Nvidia's rating would be "bullish" or better if its share price went above its long-term trend line.
In recent weeks, Nvidia has posted an impressive rally along with the rest of the market. And two weeks ago, the stock finally jumped back above its long-term trend line. That meant the Power Gauge switched to "very bullish."
The smart money surged in. And the stock's relative strength ticked back into positive territory. Take a look...
If this pattern holds, there's a better chance that a strong earnings report could send Nvidia's stock upward.
But as I said, we're still a few weeks away from Nvidia's highly anticipated earnings release. News in the AI space can move fast. So these positive developments for the stock could also turn negative at a moment's notice.
Folks, Nvidia's earnings report will be key for gaining more insight on what could be next for the AI megatrend...
So even if you don't hold the stock, keep your eye on it as we get closer to this important day – and watch it in the Power Gauge, too.
Good investing,
Vic Lederman
Editor's note: The AI boom isn't slowing down. However, a looming "Dark Chip" crisis could create massive losses for investors – and not even the "old guard" AI companies are safe.
However, two investing legends have found a silver lining. This opportunity can protect your portfolio from this crisis... and hand you some of the greatest returns they've seen in their 90 combined years of investing. Click here to learn more.
