On November 19, Financial Association news (Editor: Huang Junzhi) the 'AI leader' Nvidia will disclose its third-quarter financial report this Wednesday (20th local time), also its first financial report after being included in the Dow. Therefore, this is likely to become another 'barometer' of the US stock market.

According to BofA Global Research, compared to the next non-farm employment data, CPI, or the Fed meeting, the chip manufacturer's profits may pose a greater risk to the S&P 500 index.

Currently, the surge driven by the 'Trump rally' has stalled, and investors are starting to shift their focus back to tech stocks and AI trading.

Bank of America strategists led by Gonzalo Asis emphasize that Nvidia's latest performance report may determine the recent trend of the US stock market.

"The US stock market has always been highly attentive to election influences, interest rate fluctuations, and the Fed, but the options market tells us that Nvidia's financial report is still a very important factor for the entire market," they wrote in their latest report.

Analysts point out that according to the chart below, the implied volatility of the S&P 500 index is consistent with Nvidia's own implied volatility, indicating that the risks from the financial report are higher than the upcoming employment and inflation data or the Fed meeting.

"The options market allocates higher market risk to Nvidia's profit than other potential market events, such as the release of the next non-farm payroll report, consumer price index (CPI) report, or even the Fed's December policy meeting," wrote Asis and his team.

Nvidia will be the last company to announce earnings among the magnificent 7 in technology. Analysts surveyed by FactSet generally expect this chip manufacturer's quarterly sales to reach $33.1 billion, a 10% increase from the previous quarter, and an 83% increase from the same period last year.

Indeed, Nvidia is the most dominant stock in the US stock market, bringing a 20% return to the S&P 500 index in the past year. Bank of America analysts stated that they expect the company to continue to drive nearly 25% growth in S&P 500 index earnings per share (EPS) in the third quarter.

This is why Asis and his team warned that if Nvidia's earnings released on Wednesday disappoint, the risk of "single stock fragility" associated with the company will rise.

However, for investors looking to hedge downside risks, Bank of America stated that if the tech-heavy Nasdaq 100 index falls by around 3% this week, put option spreads may offer an "attractive return."

Finally, it is worth mentioning that before Nvidia's earnings report this week, there was bad news: its next-generation Blackwell artificial intelligence chip faced delivery delays again.

Reportedly, this AI chip has serious overheating issues in high-capacity server racks. This defect has forced Nvidia to revise the rack design multiple times, not only restricting GPU performance but also potentially damaging hardware. Clients are concerned that these technical issues will delay the deployment process of processors in datacenters.

Since Nvidia launched the Blackwell chip series in March this year, delivery times have been repeatedly postponed. From the initial second quarter of this year, to later expectations by CEO Huang Renxun of the fourth quarter, and now according to media estimates, the improved Blackwell GPU may not ship until the end of January next year at the earliest.