After a record‑setting run, the rally in artificial‑intelligence stocks may be hitting a wall. Much of Wall Street’s focus is now on Nvidia’s second‑quarter results. The chipmaker, whose share price has more than tripled since 2024 and jumped over 1,400 % since 2022, is the poster child of the AI boom. Its sales momentum has underpinned the broader technology sector, which now makes up roughly a third of the S&P 500. A disappointing report could reverberate through the index: in the week before the results, the tech sector fell 1.6 %, wiping billions from market capitalization. Traders worry that any hint of slowing demand for AI hardware could trigger a deeper pullback because the sector’s gains have been so concentratedreuters.com.
As the summer earnings season winds down, analysts point to sky‑high valuations and warn that the frenzy around artificial intelligence may have overshot reality. The S&P 500 has repeatedly set new records on the back of a handful of megacap tech stocks, leaving the benchmark vulnerable if investors lose confidence. With the Federal Reserve poised to start cutting interest rates later this year, a softer macro backdrop is already raising questions about future profit growth. Market strategists say Nvidia’s guidance will influence sentiment not just for chipmakers but for every company tied to the AI supply chain, making this one of the most important earnings calls of 2025. A blowout quarter could reignite the rally; a miss could spark a correctionreuters.com.
Citations: reuters.com
