From Wall Street to India, Nvidia results seen as Litmus test for AI-driven rally

U.S. stock markets traded higher on Wednesday as investors awaited earnings from chip giant Nvidia , whose results are widely seen as a barometer for the global artificial-intelligence boom. The S&P 500 rose 0.5%, while the Dow Jones Industrial Average gained 0.3% and the Nasdaq Composite climbed 0.7% in early trading.

Analysts expect Nvidia’s profit to jump nearly 70% year-on-year, underlining its dominance in AI chips used by global cloud providers and technology firms. Because Nvidia sits at the center of AI infrastructure spending, its earnings influence not only Wall Street but also markets in Asia and emerging economies such as India, where IT companies and data-center investments are closely linked to global tech cycles.

Markets remain split between optimism and caution. While Nvidia’s strong revenues point to real demand for AI computing power, concerns persist that companies like Alphabet and Amazon may be overspending on chips without clear returns in productivity. Some strategists warn that stretched valuations echo elements of the late-1990s dot-com boom.

However, others argue today’s AI cycle is different. “This time, adoption is happening alongside revenue growth,” said Darrell Cronk, chief investment officer at Wells Fargo Wealth & Investment Management. “The market is being driven by earnings, not just expectations.”

Retail investors have faced sharp swings as markets reassess which industries benefit from AI and which could be disrupted. Stocks in software, logistics and legal services have seen sudden sell-offs, while companies posting strong earnings outside Big Tech have gained renewed attention.

Looking ahead, analysts expect semiconductor demand to stay strong as governments and corporations expand AI infrastructure. While risks remain from supply-chain pressures and geopolitical tensions, Nvidia’s performance is increasingly viewed as a guide to whether the AI rally reflects a lasting technology shift or a short-term speculative surge.