The shutdown is out of the way. The Federal Reserve doesn't meet for another month. Now it might all come down to Nvidia next week. Again. The artificial intelligence chipmaker's latest earnings results, set for next Wednesday after the close, couldn't come at a more delicate moment for the stock market, which has been weighed down this month by signs of weakness in tech land. In midday trading Friday, the Dow Jones Industrial Average was headed for a 0.6% gain on the week, the S & P 500 was ahead 0.3% since last week's close and the Nasdaq Composite had recovered to see just a 0.2% weekly loss. But for the month, the S & P 500 and Nasdaq Composite, which both tilt toward growth names, have lost 1.5% and 3.6%, respectively, through the Thursday close. The Dow Industrials, with fewer tech stocks and more "old economy" companies, has outperformed, as investors rotate into lesser loved parts of the market. The latest swings come amid a raft of concerns around the AI trade. Investors have been on edge for weeks, given high valuations that have traders worried about an "AI bubble." Prominent voices in the market— from Bill Gates to Michael Burry to Jim Chanos — have spoken out this month, highlighting concerns and asking whether the hundreds of billions promised to be invested in AI will all prove profitable. As a result, Nvidia's results next week could soothe some rattled nerves around tech, given that where the AI chipmaker goes, the stock market seems to go as well. Nvidia, which last month was briefly the first public company ever to top a $5 trillion valuation, is the largest weighting in the S & P 500, accounting for roughly 8% of the entire index. It's up 39% this year through Thursday, but down almost 8% this month. "That's something I'm watching — if Nvidia is able to make the rest of the tech trade look better, help it recover from the doldrums it's been in over the past few weeks," said Hardika Singh, economic strategist at Fundstrat Global Advisors. CEO Jensen Huang's company could help tech resume its market leadership. As of the Thursday close, the major averages were headed for a mixed week, with the Dow Jones Industrial Average rising 1%, the S & P 500 up a fraction while the Nasdaq Composite was losing 0.8%. High expectations There's little doubt on Wall Street that Nvidia will once again deliver eye-popping results. A flood of joint agreements and new contracts announced in recent months alone have analysts optimistic heading into the latest quarter's print. There was the $100 billion investment into OpenAI to build out data centers announced in September, on top of a $5 billion stake in rival Intel for a collaboration on AI processors. Then, last month, there was the $1 billion stake in Nokia , as well as a strategic partnership with the networking company to develop next-generation 6G cellular technology. "With AI infrastructure investment firing on all cylinders, expectations for off-cycle slate of earnings are elevated ... for good reason," TD Cowen semiconductor analyst Joshua Buchalter wrote in a note this week. "We take numbers up across the board." Yet there remain the doubters on the viability of the AI trade, sounding alarms across Wall Street. This week, Michael Burry, the investor made famous in " The Big Short ," accused some of the largest U.S. technology companies of using aggressive accounting to pad their profits from the AI boom. On Wednesday, SoftBank Group shares dropped 10% after the Japanese investor sold its entire stake in Nvidia for close to $6 billion. "The trees this week are not so ominous when seen individually," Peter Corey, chief market strategist at Pave Finance, wrote earlier. "But taken collectively will have an eventual impact." More strategists are advising investors to trim their tech exposure, given their massively overweight in the indexes. Instead, they advise traders to start adding positions in more attractively valued stocks, such as health care or financials, that have been punished since their earlier highs, and could be poised for a turnaround. Others are more complacent. Fundstrat Global Advisors' Singh said she's sticking with tech stocks, saying she would take any dip as an opportunity to add exposure to what she calls the names at the forefront of the modern American revolution. "Whenever tech trade is going down a little bit, everybody's so quick to jump on the bandwagon that these are [such] expensive stocks — 'These are so expensive,' 'You shouldn't buy it,' 'It's a bubble,'" Singh said. "I'm kind of tired with that argument. You know, pick a new one." "If you're gonna have problems with the bull run, at least find like something that actually has a basis to it other than valuations," Singh continued. "Because if [bears] just follow valuations, according to them, the market should have crashed a long time ago." Nvidia aside, also on the docket next week: minutes from the October Federal Reserve policy meeting come out at 2 p.m. ET Wednesday. Week ahead calendar All times ET. Monday, Nov. 17 Tuesday, Nov. 18 Earnings: Home Depot, Medtronic Wednesday, Nov. 19 Earnings: Lowe's Companies, Raymond James Financial, Target, The TJX Cos., Palo Alto Networks, Nvidia, Palo Alto Networks Federal Reserve: FOMC minutes 2 p.m. ET Thursday, Nov. 20 Earnings: Jacobs Solutions, Walmart, Intuit, Ross Stores Friday, Nov. 21
