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This week, companies with a combined value of nearly $17 trillion will report quarterly results. Nearly $13 trillion in market cap will follow next week.
But the breadth and depth of corporate earnings expected to be released don’t make this week and next week the biggest week for first-quarter earnings season.
That crown will be worn a month from now when Nvidia (NVDA) reports earnings on May 22.
By the time the Kentucky Derby opens on May 4, 341 companies in the S&P 500 will have told investors how their first three months of 2024 went, according to data from Bespoke Investment Group.
Combine this with next Friday’s PCE inflation data, next Wednesday’s Fed meeting, and the May 3 April jobs report, and virtually every piece of key data for the markets will get a moment in the spotlight over the next two weeks. to stand.
But part of what makes Nvidia’s report next month more important than this cluster is that it stands alone on the calendar. For example, Alphabet (GOOG, GOOGL), Microsoft (MSFT) and Meta (META) all report results this week.
Should these readings about the growth of AI within their product range or shifts in the digital advertising market conflict, investors can choose their own path in or out of the story.
Nvidia and the AI business have also shown signs of some vulnerability after boosting markets for much of this year and assuaging investor fears about rising interest rates.
Last week, investors got to see how sensitive AI trading has become.
ASML (ASML), which makes the technology that allows chip companies to make better, more advanced chips, reported disappointing bookings on Wednesday. Shares fell 8%.
TSMC (TSM) reported results the next day that left investors in stitches, with Bloomberg noting that the company cut expectations for overall chip growth this year and saying “macroeconomic and geopolitical uncertainty” could dampen end-market demand . The stock lost 5%.
On Friday, news from Super Micro Computer (SMCI) that the company would report results next week but not announce performance to investors in advance was cited by analysts as enough to cause a 19% share price drop.
Against the backdrop of these negative surprises from the chip world, market leaders such as AMD (AMD), Micron (MU) and of course Nvidia have seen their share prices come under pressure.
Prior to this profit period, expectations were high.
And as Yahoo Finance’s Josh Schafer wrote on Monday, these forecasts have created early challenges for companies that aren’t rewarded for beating estimates and are judged heavily for falling short.
Furthermore, all profit periods carry inherent instability. Everyone knows when a company will release a material update on its operations, and the votes will rise or fall.
And combining a calendar-provided spotlight with Nvidia’s central role in the AI story underlying the market’s rally, it appears that the busiest weeks of the earnings season may not ultimately be the most important.
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