Nvidia’s upcoming earnings report, scheduled for August 28, could significantly impact the AI trade, which has been experiencing a decline recently. Despite major AI stakeholders like Alphabet, Amazon, and Microsoft announcing significant investments in AI frameworks, their stock prices have dropped by 14%, 8%, and 7%, respectively, over the past month. This lackluster performance is attributed to the lack of clear timelines for these investments to translate into revenue.

Nvidia, a key player in the AI sector, has yet to disclose its earnings. Its performance could have a profound influence on the AI market, potentially more so than the software-centric hyperscalers. Unlike its counterparts, Nvidia has not faced challenges with revenue generation, and its demand for Hopper AI chips remains high. The company plans to increase production of its Blackwell series later this year.

Analysts predict that Nvidia’s revenue for the upcoming quarter could reach $28.6 billion, indicating a 112% increase from the previous year. However, this growth rate may not continue indefinitely, as the company faces challenging year-over-year revenue comparisons. Despite these concerns, Nvidia remains a shining star in the AI sector, with 66 analysts issuing Buy ratings and only seven Hold ratings as of Thursday.

The AI sector’s allure seems to be waning, but Nvidia’s earnings could help turn around this trend. The company’s ability to consistently deliver impressive year-over-year revenue growth, combined with its strategic position in the AI chip market, makes its earnings report a crucial moment for the AI trade.