&#34;If NVIDIA sneezes, everyone catches a cold,&#34; said Luke Rahbari, CEO of Equity Armor Investments.
As the undisputed pillar of the U.S. stock market bull run over the past few years, NVIDIA's stock price has been stagnant for months. Since Q4 of last year, NVIDIA's stock price has only risen by 1.7%, underperforming the S&amp;P 500 index's 3.3% increase during the same period; since the beginning of 2026, NVIDIA's return has fallen into the lower half of the S&amp;P 500.
This Wednesday, NVIDIA will announce its highly anticipated fourth-quarter and full-year earnings report. The consensus on Wall Street is that the performance will still be strong, even &#34;crushing&#34; analysts' expectations. However, against the backdrop of rising skepticism about AI and a turbulent macro environment, the real question is: Is merely being &#34;good&#34; enough?
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c26a376f-8308-4d35-8283-f128e2d9e672.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c26a376f-8308-4d35-8283-f128e2d9e672.png"/>
<h2>Can this week's &#34;most important global earnings report&#34; pull through?</h2>
&#34;From a fundamental perspective, NVIDIA's story remains strong; the question is whether market sentiment can keep up,&#34; said Matt Stucky, Chief Equity Portfolio Manager at Northwestern Mutual Wealth Management.
Investors are facing a typical &#34;expectation paradox.&#34; Although the market generally expects NVIDIA to raise guidance for the next few quarters, historical data shows that after the last two earnings reports, NVIDIA's stock price faced sell-offs.
Rhys Williams, Chief Strategist at Wayve Capital Management, warned that the stock price could drop if the performance is &#34;not good enough.&#34;
<blockquote>
&#34;Based on our observations, even if the official earnings report and guidance are fine, they may just not meet expectations.&#34;
</blockquote>
This dilemma is not unique to NVIDIA. The once largest contributors to the market, the &#34;Magnificent Seven&#34; tech giants, have collectively fallen nearly 1% since Q4 of last year, underperforming the S&amp;P 500 index during the same period.
Behind investors' cautious sentiment lies a profound anxiety about whether the hundreds of billions of dollars in AI capital expenditures (Capex) by these giants can translate into actual profits. Microsoft's stock price fell after it released strong earnings because investors were fixated on the slowing growth of Azure and record spending expectations.
<h2>Macroeconomic Headwinds — When AI Meets a Complex 2026</h2>
In addition to internal valuation corrections within the industry, NVIDIA must also face a complex macro environment.
The start of 2026 is filled with uncertainty. Geopolitically, the Trump administration's threats of attacks on Iran have left the market on edge; on the policy front, the Supreme Court has just struck down President Trump's tariff policy — although this is generally seen as a positive for U.S. companies, it has also made the future direction of the White House's economic policies murky.
Economic data is equally mixed. Data released on Friday showed that economic growth is slowing while inflation remains stubborn. After experiencing a &#34;soft 2025,&#34; the labor market shows signs of stabilization, which has led traders to bet that the Federal Reserve will take a cautious stance on further interest rate cuts
In such a noisy macro environment, it is evident how difficult it is for NVIDIA to turn the tide with its financial report.
<h2>Valuation Bottom or Value Trap?</h2>
However, the prolonged stagnation over the past few months has not been without its benefits—it has squeezed out a lot of the excesses from NVIDIA.
Currently, NVIDIA's forward price-to-earnings ratio has fallen below 24 times, close to a five-year low, and significantly lower than the five-year average of 38 times. Will McMahon, Chief Equity Strategist at MFA Wealth, believes that the relatively cheap valuation could serve as a catalyst for buying:
<blockquote>
&#34;People still see NVIDIA as the market savior, hoping it can calm the current market sentiment fluctuations.&#34;
</blockquote>
But a low valuation is merely a ticket to enter; to reignite the upward trend, CEO Jensen Huang must tell a compelling new story, especially regarding the defensive battle for market share.
As AMD, Amazon, Broadcom, and Alphabet (Google's parent company) all launch &#34;inference chips&#34; for generating AI models, the competitive landscape is subtly changing. Alec Young, Chief Investment Strategist at Mapsignals, points out that NVIDIA's valuation multiples will continue to be compressed until the market is convinced that it can maintain its market share and order flow.
Matt Stucky adds: &#34;In the long run, the key to boosting sentiment lies in whether Jensen Huang can convincingly argue that NVIDIA will continue to dominate the 'inference market.' This is the core of its long-term logic.&#34;

NVDA

NVDY

If performance cannot calm the restless market, the ensuing volatility may affect the AI sector and even the entire market

- NVIDIA's stock has shown limited growth of only 1.7% since Q4 of last year, underperforming the S&P 500 index.  
- As NVIDIA prepares to release its quarterly earnings, analysts expect strong results; however, concerns arise over whether "good" performance will suffice amidst increasing skepticism around AI and a turbulent macroeconomic landscape.  
- The company faces pressure to maintain market share amid rising competition, signaling that a convincing narrative from its CEO will be crucial for inspiring investor confidence and reversing its stock's stagnation.

Wallstreetcn

NVIDIA

VanEck Semiconductor ETF

YieldMax NVDA Option Income Strategy ETF

T-Rex 2X Inverse NVIDIA Daily Target ETF

ProShares Ultra QQQ

Direxion Daily NVDA Bear 1X ETF

Spdr Select Tech

Direxion Daily NVDA Bull 2X Shares

Invesco QQQ Trust

ISHRS S&P Glb It

iShares Future AI & Tech ETF

Direxion Semicon Bull 3X

SPDR S&P Semicon

AXS 1.5X NVDA Bear Daily ETF

T-Rex 2X Long NVIDIA Daily Target ETF

GraniteShares 2x Long NVDA Daily ETF

First Trust NASDAQ-100 Equal Weighted

Proshares UltraPro QQQ

Invesco Semiconductors ETF

Ark Innovation ETF

iShares Semiconductor ETF

NVIDIA has been "stagnating" for months; can this week's "most important financial report in the world" make a difference?