Keep the World's Biggest Company on Your Radar Over the Next Month

Editor's note: When one company sits at the center of a major trend, its earnings report can move the entire market. In this issue, Vic Lederman, publisher for our corporate affiliate Chaikin Analytics, explains why one semiconductor giant's upcoming earnings release could shape the next phase of the AI trend – and how one useful system can help investors stay on the right side of the move...

We're about two weeks away from what could be a blockbuster day for the markets...

On May 20, the biggest company on the stock market is set to report earnings. And if past earnings are any sign of what's to come, we could see a big swing in the markets the next day.

I'm talking about Nvidia (NVDA), of course.

As I said, we're still a couple weeks away from the semiconductor giant's first-quarter earnings for its 2027 fiscal year. But it's important to keep this massive event 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 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%.

Still, investors weren't as enthusiastic as you'd expect. Early in March, my colleague Ethan Goldman also discussed Nvidia's fourth-quarter 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 that earnings season...

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.

The Power Gauge is a tool we use at Chaikin Analytics for analyzing the market. It gathers investment fundamentals and technicals into a simple rating of "bullish," "neutral," or "bearish."

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, with just weeks left until Nvidia's next earnings release, the picture in the Power Gauge has changed – at least for the time being...

Nvidia Is Back at a Crucial Turning Point

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.

A "neutral+" rating isn't bad. It simply meant Nvidia's rating would be "bullish" or better if its share price rose above its long-term trend line.

In recent weeks, Nvidia 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.

We now find ourselves at a crossroads with Nvidia. The stock has pulled back after that big surge. It now sits right around the long-term trend line. Take a look...

If the stock rebounds and continues its upward trend, there's a better chance that a strong earnings report could send Nvidia shares higher.

But there's still time before Nvidia's highly anticipated earnings release. And news in the AI space can move fast. That means the positive developments for the stock could 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: Don't miss your last chance to understand what's really happening inside the AI boom. Earnings season is already exposing cracks in the market's biggest names... And according to Chaikin Analytics founder Marc Chaikin, a critical shift is already underway that will change the companies that lead us into the next phase of the AI boom.