Nvidia has been at the center of the AI revolution, making it one of the most important companies in the stock market. Over the past two years, Nvidia’s value has skyrocketed, mainly because of the growing demand for AI technology. As a result, Nvidia’s stock has become a favorite among investors. But with great success comes great pressure.

Recently, Nvidia’s stock has been on a wild ride. After reaching a record high in June and even briefly becoming the world’s most valuable public company, Nvidia’s stock took a sharp dip, losing almost 30% of its value in just seven weeks. That’s roughly $800 billion gone in a blink. However, the stock has started to climb again and is now within 7% of its all-time high.

Investors are now anxiously waiting for Nvidia’s next earnings report, which is expected to be released soon. The big question is whether the company can continue its incredible growth or if the AI boom is starting to slow down. If there’s any sign that demand for AI is decreasing or that big cloud companies are cutting back on their spending, it could mean trouble for Nvidia—and for the stock market as a whole.

Some experts are very optimistic about Nvidia’s future. Eric Jackson from EMJ Capital called Nvidia “the most important stock in the world” during a recent interview. He believes that Nvidia will surprise everyone with strong earnings and that this could boost the entire market.

Nvidia has been benefiting from big investments by tech giants like Microsoft, Alphabet (Google’s parent company), Meta (formerly Facebook), Amazon, and Tesla. These companies rely heavily on Nvidia’s graphics processing units (GPUs) to power their AI models and manage massive data workloads. Over the past three quarters, Nvidia’s revenue has more than tripled, thanks mainly to its data center business.

For the upcoming report, analysts are expecting another quarter of triple-digit growth, with a predicted 112% increase in revenue to $28.7 billion. However, this growth rate is expected to slow down in the coming quarters as year-over-year comparisons become tougher.

Investors will be paying close attention to Nvidia’s forecast for the next quarter. The company is expected to show growth of about 75%, bringing its revenue to $31.7 billion. If Nvidia’s forecast is optimistic, it could indicate that big customers are still willing to spend heavily on AI infrastructure. On the other hand, a disappointing forecast could raise concerns that the boom in AI spending might be reaching its peak.

Goldman Sachs analysts have noted that the current spending spree on AI by big tech companies might not be sustainable in the long term. However, there is still a lot of optimism surrounding Nvidia’s future, especially given the positive comments from major customers like Google and Meta. Last month, the CEOs of these companies spoke highly of their ongoing investments in data centers and Nvidia-based technology, suggesting that they believe in the long-term potential of AI.

Another factor to watch is Nvidia’s profit margin, which has been growing recently. But some investors are concerned about whether Nvidia’s customers will see a good return on their investment in the long run. Nvidia’s chips are expensive, costing tens of thousands of dollars each, and customers are buying them in bulk. Nvidia’s CFO Colette Kress has provided some data suggesting that cloud providers could generate $5 in revenue for every $1 spent on Nvidia chips over four years. More such figures are expected in the upcoming report to reassure investors.