Nvidia will move the market tonight in a test of the alleged AI bubble

In the three months since the company last gave investors a quarterly update, back in May, Nvidia’s stock has surged 35%. Wall Street analysts are looking for Nvidia’s Q2 revenue to surge 53% year-over-year to $46 billion, at the high end of Nvidia’s guidance, with earnings per share of $1.01. Data center sales, the crux of Nvidia’s business, are expected to come in close to $40 billion.

And uncertainty about Nvidia’s China business continues to loom large. After previously banning Nvidia from selling to China, earlier this month, Nvidia and AMD struck a deal with the Trump administration to grant export licenses in exchange for a 15% revenue-sharing arrangement on China chip sales. “I suspect they will not count, nor forecast China revenue, there’s too much uncertainty involved,” predicts Karl Freund, founder and principal analyst at Cambrian-AI Research.

Beyond geopolitics, Nvidia faces another challenge: The tension surrounding what is already the most closely watched earnings event of the season has been ratcheted up by recent jitters over what some worry is a dangerous financial bubble in AI-related stocks. This would strike at the heart of Nvidia’s business and its stratospheric valuation—the company trades at more than 40 times its projected earnings—which rely on ever-growing demand for its powerful GPUs. Nvidia’s growth is heavily concentrated in a handful of cloud giants, including Meta, Amazon, Google and Microsoft, as well as highly funded AI startups like OpenAI. If those companies slow their spending, Nvidia could suddenly lose its biggest buyers. And with Nvidia’s shares having gained so much in recent months, a miss on Wednesday, or cautious guidance tied to China restrictions, could send Nvidia stock—or for that matter the broader market—plummeting.

Let the watch parties begin.—Sharon Goldman

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top news

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DOJ sued over Epstein files

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The markets

S&P 500 futures were flat this morning premarket, after the index closed up 0.41% yesterday. STOXX Europe 600 was flat in early trading. The U.K.’s FTSE 100 was up 0.11% in early trading. Japan’s Nikkei 225 was up 0.33%. China’s CSI 300 was down 1.49%. The South Korea KOSPI was up 0.25%. India’s Nifty 50 was down 1.02% before the end of the session. Bitcoin rose to $110.6K.

Around the watercooler

First-of-its-kind Stanford study says AI is starting to have a ‘significant and disproportionate impact’ on entry-level workers in the U.S. by Nick Lichtenberg

Why every CEO—and every American—should be fed up with Trump’s Fed attack by Jeffrey Sonnenfeld and Stephen Henriques

Taylor Swift’s ‘amazing’ 8-carat engagement ring set Travis Kelce back $550,000, jewelry expert estimates by Eva Roytburg

The world’s youngest self-made billionaire says the secret to closing deals is exploiting investors’ greed and fear of missing out by Dave Smith

CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.