NVIDIA's earnings report is about to be released, and Wall Street is focused on the direction of the AI market.

On August 27, after the close of the US stock market, Nvidia will announce its second fiscal quarter financial report. The market is closely watching its movements in the context of the US-China AI competition, chip supply and demand relations, and the investments from hyperscale customers. The financial report also relates to the direction of the entire stock market and the underlying AI market. According to market data, Nvidia is currently up 0.03% during trading, and its concept stock CoreWeave is active, currently rising nearly 5%. Investors have generally believed that the performance will exceed expectations before the report is released. According to FactSet data, Nvidia is expected to report revenues of $46.05 billion for the second fiscal quarter, higher than the $45 billion guidance given in the previous quarter, with an expected earnings per share of $0.95 and a net profit projected at $23.4 billion. Revenues from data centers are expected to reach $41.34 billion, a year-on-year increase of 57%. Although this is a strong growth rate, it is lower than the 73% growth rate announced in Nvidia's most recent financial report. Piper Sandler analyst Harsh Kumar stated that Nvidia's guidance on its China business will be the focus of Wednesday's financial report. Nvidia's chips are at the center of the tech arms race. Trump announced that the US would take a 15% share from Nvidia's chip sales in China, while local Chinese companies are trying to avoid using Nvidia's H20 chips. Reports indicate that Nvidia has suspended the production of H20 chips. As China strives to strengthen its domestic chip industry, whether Nvidia can generate revenue from the Chinese market will be a key indicator of how much technological advantage the US holds. Additionally, hyperscale customers, which are companies building AI infrastructure, have been continuously raising their capital expenditure expectations and purchasing Nvidia's GPUs in large quantities. These companies' multi-billion dollar budgets are undoubtedly favorable for Nvidia, but last week's tech-led market sell-off has raised concerns among some investors about the sustainability of such large-scale investments. In Nvidia's first fiscal quarter financial report, 30% of the company's revenue came from just two customers, indicating a very high customer concentration. Nevertheless, analysts remain optimistic about the spending of hyperscale customers, believing that they are making a full-scale push towards General Artificial Intelligence (AGI) and have a clear spending plan, which can last for at least a few more years.