Nvidia has been "stagnant" for months—can this week's "most important global earnings report" get things moving?

“If Nvidia sneezes, everyone catches a cold,” said Luke Rahbari, CEO of Equity Armor Investments. As the undisputed pillar of the U.S. stock bull market in recent years, Nvidia’s stock price has been fluctuating sideways for several months. Since Q4 last year, Nvidia’s share price has risen only 1.7%, trailing the S&P 500’s 3.3% gain during the same period; since the start of 2026, Nvidia’s performance has fallen into the bottom half of the S&P 500. This Wednesday, Nvidia will release its highly anticipated fourth-quarter and full-year earnings report. The consensus on Wall Street is: the results will still be strong, possibly even “crushing” analyst expectations. But amid rising AI skepticism and turbulent macro conditions, the real question is: is merely “good” enough? Is this week’s “world’s most important earnings report” enough to move the market? “From a fundamental perspective, Nvidia’s story remains robust, but the question is whether market sentiment can keep up,” said Matt Stucky, Chief Equity Portfolio Manager at Northwestern Mutual Wealth Management. Investors are facing a typical “expectation paradox.” Although the market generally expects Nvidia to raise its guidance for the coming quarters, historical data shows that Nvidia’s stock price has sold off after the last two earnings releases. Rhys Williams, Chief Strategist at Wayve Capital Management, warned that the stock price could decline if the results are “not good enough.” “In our observation, even if the official earnings report and guidance are fine, they may just fall short of expectations.” This predicament isn't unique to Nvidia. The “Magnificent Seven” tech giants, once the market’s biggest contributors, have collectively dropped nearly 1% since Q4 last year, underperforming the S&P 500. Underlying investors’ cautious sentiment is profound anxiety about whether the giants’ tens of billions of dollars in AI capital expenditures (Capex) can turn into actual profits. Microsoft released strong earnings previously, but its stock price fell because investors fixated on slowing Azure growth and record spending forecasts. Macro Headwinds—When AI Meets a Complicated 2026 Beyond industry-wide valuation adjustments, Nvidia must also contend with a complex macro environment. The start of 2026 has been filled with uncertainty. Geopolitically, threats from the Trump administration to attack Iran have kept markets on edge; on the policy front, the Supreme Court just overturned Trump’s tariff policies—although this is usually seen as good for U.S. companies, it also makes the future direction of White House economic policy unpredictable. Economic data is also mixed. Friday’s data showed economic growth is slowing, while inflation remains stubborn. After a “weak 2025,” the labor market shows signs of stabilization, but this in turn has prompted traders to bet that the Federal Reserve will take a cautious approach to further rate cuts. Against such a noisy macro backdrop, it’s easy to imagine how difficult it will be for Nvidia to turn things around solely with its earnings report. Value Opportunity or Value Trap? However, months of stagnation haven’t been all bad—they’ve squeezed out a lot of bubbles for Nvidia. Now, Nvidia’s forward price-to-earnings ratio has fallen below 24, near its lowest in five years and well below the five-year average of 38. Will McMahon, Chief Equity Strategist at MFA Wealth, believes that the relatively cheap valuation may be a catalyst to buy: “People still see Nvidia as the savior of the market, hoping it can calm current swings in sentiment.” But a low valuation is only a ticket in; to restart the rally, CEO Jensen Huang must tell a new story, especially about the defensive battle for market share. As AMD, Amazon, Broadcom and Alphabet (Google’s parent company) roll out “inference chips” for generative AI models, the competitive landscape is subtly shifting. Alec Young, Chief Investment Strategist at Mapsignals, says that until the market is confident Nvidia can maintain its market share and order flow, its valuation multiples will continue to be compressed. Matt Stucky adds: “In the long run, the key to boosting sentiment is whether Jensen Huang can convincingly argue that Nvidia will continue its dominance in the ‘inference market.’ That is the core underpinning its long-term logic.” Risk Warning and Disclaimer The market has risks, and investments should be made prudently. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Invest accordingly and at your own risk.