Analysts have noted that NVIDIA's stock price has risen by 30% over the past three weeks and is now just 5% away from its all-time high. Consequently, if the upcoming earnings report fails to impress, the stock price could face a decline.

According to a Wall Street analyst, this week may be the most significant trading week of the year, as investors eagerly await NVIDIA's second-quarter earnings report set to be released on Wednesday.

Wedbush analyst Dan Ives described the forthcoming NVIDIA report as "the most important tech stock earnings report in recent years" in a report last week.
 

Ives stated last Friday, "We believe next week will be the most crucial trading week of the year and in many years for the stock market, as AI guru Jensen and NVIDIA are set to release their earnings report."

The importance of this report stems from the fact that the booming AI investments in the stock market heavily rely on NVIDIA's GPU chips, which Ives has termed the "only focal point."

To elicit a positive response for NVIDIA's stock on Wednesday, "bulls need to see enterprise demand in the AI sector leading the market to further gains," Ives explained.

However, Gene Munster, co-founder of Deepwater Asset Management, does not anticipate an increase in NVIDIA's stock price following the earnings report this week.

In an interview on Monday, Munster noted that reports of a delay in NVIDIA's next-generation Blackwell GPU have introduced some risk to NVIDIA's stock price.

Discussing the Blackwell delay reports, Munster said, "For investors who are highly attentive to every move the company makes, this may be seen as a small negative factor."

Additionally, given that NVIDIA's stock price has surged by 30% over the past three weeks and is now just 5% short of its historical peak, Munster indicated that if the earnings report is not outstanding, the stock price could drop.

Munster added, "I believe the Blackwell factor might be the most significant uncertainty this quarter, which is why I think the stock price might experience a slight decline."

Munster also commented, "I think it could be a challenging week for large tech stocks, but ultimately, the stock prices will rebound quickly as investors gradually realize that the AI investment environment is stronger than many currently believe."
 

Richard Saperstein, Chief Investment Officer at Treasury Partners, mentioned in an email on Monday that NVIDIA remains "a key component," and its earnings report is always "a matter of concern."

Saperstein said, "NVIDIA needs to demonstrate that AI spending is growing at an extremely fast pace; the pressure is still significant."

Besides NVIDIA, Salesforce's earnings report on Wednesday will also be a crucial data point for investors to consider.

Ives remarked, "Based on our recent survey, we believe Salesforce will have a strong quarter. Although there are some headwinds, this will ultimately reflect a generally healthy tech spending environment, with AI deployments and applications taking center stage and driving larger transactions."

In addition to earnings reports, investors will closely monitor data later in the week that could impact the Federal Reserve's future rate-cutting path.

The weekly jobless claims report, released on Thursday, will provide more information about the current job market conditions, while the PCE index, released on Friday morning, will show inflation trends. The PCE index is considered the Fed's preferred inflation gauge.

Although the market widely expects the Federal Reserve to cut rates at the September FOMC meeting, there remains uncertainty over whether the reduction will be 25 basis points or 50 basis points.

In summary, investors face a significant trading week as the stock market concludes the summer season, with the week starting off with the Dow Jones Industrial Average reaching new highs.