Nvidia Leads Market Higher Ahead of Earnings Report as Investors Eye AI Spending Concerns

Nvidia drove U.S. stock markets higher Wednesday as investors awaited the chip giant’s earnings report, which analysts expect to show massive profits from the artificial intelligence boom.

The S&P 500 rose 0.7% and recovered its losses from earlier in the week, according to market data. The Dow Jones Industrial Average climbed 210 points, or 0.4%, as of 11:45 a.m. Eastern time, while the Nasdaq composite gained 1.1%.

Nvidia emerged as the strongest single force lifting the market, climbing 2.2% even as more stocks fell within the S&P 500 than rose, according to trading data. The company’s stock performance comes ahead of its highly anticipated profit report scheduled for release after trading ends Wednesday.

Analysts are forecasting Nvidia will report profit surged nearly 70% from a year earlier to $37.52 billion, according to analyst estimates. That figure would mean the company made more than $400 million per day during the three months through Jan. 25.

Nvidia’s profit reports have become a bellwether for the broader market, not only because it has become Wall Street’s biggest stock but also because of how influential AI has become over market movements. The AI frenzy helped drive stocks to record highs in past years amid hopes the technology would revolutionize the economy and boost productivity.

However, concerns have grown about whether companies like Alphabet and Amazon are spending so much on chips from Nvidia and other equipment that they will never recoup their investments through future productivity gains. If that leads to reduced spending, it would directly impact Nvidia’s business.

Investors have also begun focusing on companies and industries that could face competition from AI-powered rivals. This has led to sudden sell-offs for stocks seen as potentially under threat, with worries spreading through industries including software, trucking logistics and legal services.

These AI-related concerns compound other market worries, including new tariffs announced by President Donald Trump to replace ones struck down by the Supreme Court.

“While those concerns are real, we believe investors would be wise to balance them out with offsetting trends that may be underappreciated in the current wall of worry headline cycle,” according to Darrell Cronk, chief investment officer for Wealth & Investment Management at Wells Fargo.

Strong profit growth from U.S. companies reporting fourth-quarter results has helped strengthen market sectors that had been overshadowed by AI mania and Big Tech, including smaller company stocks, according to Cronk.

Cava Group exemplified this trend, jumping 23.9% after the fast-casual Mediterranean restaurant chain delivered better profit and revenue for the latest quarter than analysts expected. The company’s revenue topped $1 billion for the first time in a fiscal year, up 22.5% from the previous year.

Axon Enterprise leaped 21.5% after the seller of Tasers and body cameras with AI voice-activated assistants reported bigger profit and revenue than analysts expected.

These gains helped offset a 13.7% drop for First Solar, which reported weaker profit than analysts expected.

Lowe’s fell 4.5% despite reporting higher profit than analysts expected. Investors focused instead on the home-improvement retailer’s forecast for profit over 2026, which fell short of analyst estimates.

CEO Marvin Ellison said the broad housing market remains pressured, and stocks for rival Home Depot and homebuilders also declined.

In international markets, indexes rose across much of Europe and Asia. Japan’s Nikkei 225 climbed 2.2%, and South Korea’s Kospi gained 1.9% for two of the bigger moves, according to market data.

In the bond market, the yield on the 10-year Treasury held at 4.04%, where it closed Tuesday.