Stocks rose again on Wednesday, adding to the previous session's gains, as market participants rotated back into growth stocks ahead of key earnings reports from Nvidia (NASDAQ: NVDA), Snowflake (NYSE: SNOW) and Salesforce (NYSE: CRM).
The Dow Jones Industrial Average (NYSE: DIA) climbed over 300 points to settle at 49,482.15, while the S&P 500 Index (NYSE: SPY) added 0.8% and the Nasdaq Composite (NASDAQ: QQQ) rose by 1.3% to close at 6,946.13 and 23,152.08, respectively.
"Whether such market confidence can be sustained in the coming days will partly depend on NVIDIA's earnings," wrote Ulrike Hoffmann-Burchardi, chief investment officer for the Americas and global head of equities at UBS, in a note to clients on Wednesday. "With hyperscalers having announced another step-up in capex in recent weeks, markets expect the chipmaker to forecast revenue above consensus estimates alongside strong sales growth."
Nvidia's earnings report, due out after market close on Wednesday, comes as investors grow concerned over artificial intelligence's potential impact on several sectors and more skeptical over many tech companies' high capital expenditures related to their data center rollouts.
"Hyperscale capex forecasts for CY2026 have exceeded prior expectations," Wedbush analysts wrote in a Monday note about Nvidia's upcoming earnings. "With servers and AI infrastructure representing the bulk of forward spend, we expect growth in AI investment will somewhat exceed overall capex trends."
Nvidia is currently the most valuable publicly traded company, with a market capitalization of $4.78 trillion. And the company is expect to grow, as tech giants including Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), Meta Platforms (NASDAQ: META) and Amazon (NASDAQ: AMZN) are forecasting to roughly spend a combined $700 million to meet their data center goals this year -- Nvidia's datacenter business represents about 90% of its revenue.
Wednesday's earnings call will also be the first since Nvidia purchased assets from semiconductor start-up Groq for about $20 billion in December, adding the senior leading including its founder Jonathan Ross to the company. Groq's chips support the inference side of the AI market -- referring to how AI models make decisions based on new information -- whereas Nvidia dominates the training side of the market -- teaching AI models to learn from patterns in large data sets.
"We are looking for any hints or specifics around products we should expect from Jonathan's team and how this acquisition will augment NVDA's accelerator business," the analysts wrote about Nvidia's upcoming earnings call. "With concerns around increased competition from ASIC solutions, in our view, being one of the greatest drags on NVDA's performance, we believe a strong Groq related roadmap could meaningfully allay investor concerns."
Nvidia is expected to report a 68% revenue increase to $66 billion in its fiscal fourth quarter, according to LSEG.