Nvidia reports on Tuesday. Why one company's results matter for the economy

What's coming

Nvidia publishes results for its third quarter, ending in late October, on Tuesday 17 November, after the US market closes (early Wednesday in Singapore). Analysts expect revenue of about $109 billion, up 91% on a year earlier, and earnings per share of $2.47, according to CMC Markets. They expect the company to guide to about $125 billion of revenue for the following quarter. Options prices imply a share move of about 8–9% after the results.

The results come at an unusual moment. Chief executive Jensen Huang resigned last week, and chief financial officer Colette Kress is serving as interim chief executive. The shares fell sharply after the news, and on 13 November HSBC cut its rating to hold.

Why it matters beyond one company

Nvidia's sales are mostly chips bought by companies building data centres for artificial intelligence. That makes its revenue one of the clearest real-time measures of AI investment. That spending has become a large driver of US economic growth this year (our story), and of exports from Asia: chips and computer parts drove 40% of China's export growth (our story) and South Korea's exports depend heavily on memory chips.

So the results answer a macro question: is AI investment still growing at the same pace, after this month's sell-off in AI shares raised doubts? A slowdown would ripple through growth, trade and stock markets. Our growth mechanic explains how investment adds to GDP.

Why markets are nervous

A handful of AI-linked companies make up a large share of US stock indexes, so a big move in one of them moves the whole market. That concentration is why the chip sell-off of 5 November dragged the S&P 500 down 4.4% in a day (our story). The history of the dot-com bubble shows what happens when investment runs ahead of profits; the results will show whether profits are keeping up.

Where it sits in the chain

This is Link 5, the real economy: business investment in AI is one of the main supports of growth this year, and one company's sales are its best gauge.