As the quarterly earnings release of Nvidia, the leading AI chipmaker, approaches, tension is rising in global stock markets. The market sees this report card not merely as one company's results, but as a key watershed for gauging the sustainability of AI infrastructure investment and the semiconductor stock rally.

Nvidia will announce its fiscal 2027 second-quarter results on the 26th (local time), with the results expected to be available the morning of the 27th Korean time. Reuters assessed Nvidia's earnings and the Jackson Hole symposium as major events to check the two pillars that have driven U.S. markets recently: AI investment and interest rates.

◆ Revenue of $92 billion expected... Expectations even above the company's own guidance

Ahead of the earnings release, market expectations have risen considerably. Wall Street analysts expect Nvidia's second-quarter revenue to reach approximately $92 billion. According to forecasts compiled by IBD, the revenue consensus is $92.06 billion, with adjusted earnings per share (EPS) of $2.09. If realized, revenue would nearly double year over year.

Market expectations exceed even Nvidia's own forecast. In May, when announcing its fiscal 2027 first-quarter results, Nvidia projected second-quarter revenue of $91 billion, plus or minus 2%. The Wall Street consensus of around $92 billion is about $1 billion above the midpoint of the company's guidance. Accordingly, the first key point to watch in this earnings report is whether Nvidia can meet or exceed the roughly $92 billion bar the market has raised, going beyond its own $91 billion forecast.

Growth in the previous quarter was also steep. Fiscal 2027 first-quarter revenue was $81.615 billion, up 85% year over year and 20% from the prior quarter, a record high. Notably, revenue from its core data center business rose 92% year over year and 21% quarter over quarter to $75.2 billion. Data center computing revenue was $60.4 billion and networking revenue was $14.8 billion.

◆ Profitability, China business, and next-generation platform are also key variables

Profitability is another point of interest. Nvidia projected second-quarter gross margin at 74.9% on a GAAP basis and 75.0% on a non-GAAP basis, each with a range of plus or minus 0.5 percentage points. Whether it can maintain a high gross margin of around 75% amid expanding AI chip demand could sway the market's assessment.

The China business is also a variable. When presenting its $91 billion second-quarter revenue outlook, Nvidia explicitly stated that data center computing revenue from China was not reflected in the guidance. With uncertainty over the Chinese market persisting, the management's explanation of future China revenue outlook is another area the market will watch closely.

The progress of its next-generation AI platform, Vera Rubin, is also of interest. As strong demand for the Blackwell product lineup continues, the market views the transition to next-generation systems as one of the variables that will determine Nvidia's future growth pace. Indeed, recent Wall Street earnings previews cited the timeline for scaling Vera Rubin supply and the China business outlook as key items to confirm.

◆ The significance of these results grows amid interest rate burdens

The heightened significance of these results is not unrelated to the recent financial market environment. Rising long-term U.S. Treasury yields have increased concerns about funding costs, fueling wariness about AI data center investments that require massive capital. Reuters evaluated Nvidia as a bellwether showing the flows of a broad AI ecosystem that extends beyond a chipmaker to data center expansion and the financing for it.

Ultimately, what the market seeks to confirm is not simply whether Nvidia sets another record. The key questions are whether AI data center investment continues to translate into actual semiconductor demand, whether the data center business can sustain its high growth, and whether Nvidia can carry its growth momentum into next-generation products while preserving high profitability. In terms of numbers alone, the bar is clear: Nvidia's revenue guidance is $91 billion, while Wall Street is looking at about $92 billion.

If Nvidia beats the heightened market expectations and issues a strong outlook for the next quarter, it could bolster sentiment in technology stock investment centered on AI semiconductors. Conversely, if results or forward guidance fall short, it could become an occasion to retest the high valuations of the recent AI rally.

[This article was written with the assistance of AI. It is not intended to recommend investment in, or the purchase or sale of, any specific stock. Stock markets may experience heightened volatility depending on corporate earnings, order progress, domestic and international economic conditions, and changes in supply and demand. Before making investment decisions, investors should thoroughly review corporate disclosures and business developments, and the final responsibility for investment rests with the investor.]