Nvidia’s Q3 Earnings to Test AI Rally Resilience Amid Tech Sector Cooling

Nvidia stands at a pivotal juncture as it prepares to report third-quarter earnings Wednesday. The chipmaker's spring 2023 forecast—which nearly doubled Wall Street expectations—ignited an AI investment frenzy that added $3.5 trillion in market value across the sector. Now, skepticism creeps in as Meta Platforms' 20% post-earnings plunge demonstrates growing investor unease about unchecked AI spending.

The options market anticipates heightened volatility, pricing in a 6.2% swing for Nvidia shares—the largest projected move in over a year. Analysts expect $54.79 billion in revenue and $1.25 EPS, representing robust 56% and 54% year-over-year growth respectively. Yet supply constraints may throttle CEO Jensen Huang's ambitious $500 billion Blackwell and Rubin chip sales target through 2026.

Tech's recent stumble weighs heavy. The Magnificent Seven index dropped 5.8% since Meta's late October warning shot, while the S&P 500 tracks its worst November since the financial crisis. Nvidia's 8% decline since Halloween mirrors this sector-wide reassessment of AI's near-term payoff potential.