- Nvidia will unveil its second-quarter results on Wednesday.
- AI crypto coins have surged to $33 billion in anticipation.
- However, traders should brace for more market chaos if the chipmaker fails to impress, an analyst says.
Traders are bracing for Nvidia earnings.
“They will have to really impress,” Luke Nolan, research associate at alternative asset manager CoinShares, told DL News.
Stakes are high. Disappointing results from other Silicon Valley giants punctured some of the AI momentum this month and — together with recession fears — triggered the worst one-day stock plunge since 2022. Crypto suffered, too.
AI has become a major factor driving growth in the crypto industry. Bitwise estimates it to contribute $20 trillion to global GDP by 2030, and venture capitalists expect to pour hundreds of millions into the intersection of AI and crypto over the next few years.
Two outcomes
Nvidia has been riding AI hype to briefly become the world’s most valuable public company in June. If it meets expectations, analysts expect investors to sell shares to pocket some gains before loading up on the stock again.
The anticipation of that scenario has driven the total value of AI-linked coins almost 80% higher in the past three weeks to $33 billion on Friday, according to CoinMarketCap. It’s since slipped to about $30 billion.
The market is “pre-positioning ahead of what is expected to be another very solid quarter for Nvidia,” David Brickell, head of international distribution at capital markets advisory firm FRNT, told DL News.
That positioning, however, could come back to bite them, Nolan said.
Not only will US benchmarks including the S&P 500 and the Nasdaq fall, but AI crypto will “get hit more drastically as the narrative trade unwinds,” he added.
That’s unlikely, said Brickell, who sees. “little reason to expect anything but another strong report.”
The “AI sector continues to be a powerful growth story that investors will increasingly look to participate in,” he added.
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
