How Nvidia's Q1 earnings could affect the market

Nvidia (NVDA) is set to report its first quarter earnings for the 2025 fiscal year after the closing bell. Yahoo Finance's Seana Smith and Brad Smith break down Wall Street's expectations and what earnings could mean for the market (^DJI,^GSPC, ^IXIC) as a whole.

The company has a market cap of around $2.3 trillion, making up 5.05% of the S&P 500, 10.2% of the Nasdaq 100, and 20.8% of the VanEck Semiconductor ETF (SMH). It is the largest contributor to earnings growth for the tech sector, and Wall Street is expecting a 9% move in the stock after the earnings call.

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Read More about what to expect with Nvidia's earnings here

This post was written by Melanie Riehl

Video transcript

Happy Hump Day.

Our top story today, the headliner of this earnings season set to report after the closing Bell, NVIDIA taking center stage and expectations on Wall Street sky high folks.

This is a stock that's up over 200% over the past 52 weeks there.

You're taking a look at that one year move.

So let's dig into why this matters so much here for the market.

A lot of it has to do with simply just the size of NVIDIA.

When you take a look at the market cap just around two point three trillion.

So what exactly does that mean here for that outsized influence?

Its waiting is more than 4 5% excuse me of the S and P 500 just around 10% of the NASDAQ 100.

These are the latest calculations here compiled by our very own Jared blicker.

And then also when you take a look at the Vanex semiconductor ETF the waiting there just around 20%.

And it is so important to the overall story for earnings, especially what we are seeing this season.

Now we talked about technology, those mega cap names really carrying some of that growth that we have seen so far this earnings season.

Let's take a look at what those expectations are because earnings growth with NVIDIA, that would be right around 23.5% nearly 24 per percent.

Now, compare that to the earnings growth that we would see without NVIDIA and that would be just under 11% here.

So really just talking about the weight of NVIDIA right now and the massive influence it has here, Brad on the broad.

Yeah, I was looking at that stock price, as many of our viewers were as well as we had that blown up on the screen $953 right now per share for NVIDIA.

And so people may naturally ask themselves is this company too expensive?

And we were discussing that very matter actually with David Wagner from Actis on wealth a few days ago.

And one of the huge things that he was mentioning is the share is now trading at about 37 times forward pe which is actually the cheapest that they've been since the crypto blow up at the end of 2018.

He says on that basis and are now even at a discount too, as you were mentioning the index.

Well, the Philadelphia semiconductor index, the Sox index, it's even trading at a discount to that and that hasn't been managed that feat since 2014.

So all that considered it is really gonna come to where this forward and demand growth continues to get a lot of investors to see that realization of some of the new forward pe that has been on the move there there.

You're seeing it at about a little over 38 as of this morning here.

So ultimately, that's going to be one of the things I'm keeping a close tab on here.

I think the options A I um market here as well.

The options A I read on this was expecting an implied volatility or move of about 9% after this earnings report as well, we will see where, I guess in what direction the stock could potentially swing here.

And then of course, the broader market implications.