In addition to the heavy impact on the markets and Nvidia’s results, Wall Street will focus on other tech-sector quarterly reports. This includes key software companies that are beset by concerns that AI will upend their businesses.
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On 21 February 2026, 02:30 AM IST
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The heavyweight tech sector and other megacap stocks are off to a shaky start in 2026, a report from semiconductor giant Nvidia, the world’s largest company by market capitalization, said Wednesday, underscoring key indicators that have driven them higher over the past few years. AI “hyperscalers” have announced plans to increase capital spending to build data centers and other infrastructure, often using Nvidia equipment, setting the stage for the company to deliver strong results, said Marta Norton, chief investment strategist at Empower, a retirement and wealth services provider.
“Expecting big results for Nvidia has been a consistent theme over the past few years,” Norton said. “And so it’s hard for Nvidia to surprise when everyone expects a surprise.” The benchmark S&P 500 was last up a modest 0.2% for the year. But beneath the surface there has been considerable growth. Shares in industries such as software, wealth management and real estate services have been hammered by concerns that they are vulnerable to AI disruption.
NVIDIA focuses on predictions, CEO comments
Shares of Nvidia rose more than 1,500% from the end of 2022 to the end of last year. This year, its stock was up about 0.8% in 2026 as of Thursday. Other “Magnificent Seven” megacap stocks, which have fueled the current bull market, have fared worse this year. Microsoft shares are down more than 17% in 2026, while Amazon is down 11%.
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Nvidia’s stock alone can influence major indices; For example, stocks in the S&P 500 have a weighting of 7.8%.
For its fiscal fourth quarter, the company is expected to post 71% growth in earnings per share on revenue of $65.9 billion, according to LSEG. For its next fiscal year, analysts on average estimate it will earn $7.76 per share, a jump of 66%. But the range of estimates among analysts is “significant,” noted Melissa Otto, head of research at S&P Global Visible Alpha. According to LSEG data, the low end called for EPS of $6.28 for the fiscal year, versus the high-end estimate of $9.68.
“If the bulls are right, the stock might not look too expensive,” Otto said. “If the bears are right…it’s not that cheap.” CEO Jensen Huang’s comments on Nvidia’s quarterly conference call could have wider ramifications across the AI industry, including hyperscalers whose shares have come under pressure over concerns about a lack of return on capital spending.
“Janes has to come out and show his confidence in his own clients,” said Nick Giorgi, chief equity strategist at Alpine Macro. “The fact that so far, Nvidia has been a cheerleader for their biggest customers is what you need as an investor in this entire ecosystem.”
Software reports, State of the Union also on tape
Reports from major software players Salesforce and Intuit will be more significant than usual, given the AI fallout in the industry. The S&P 500 software and services index is down nearly 20% so far this year.
“Next week will be very important for software,” said King Lip, chief strategist at BakerAvenue Wealth Management. While sales in the group seem “overdone” overall, Lipp said, “I think there are some software names that … have to find a way to adapt and innovate.”
AI infrastructure players Dell and CoreWave will also post earnings next week. Outside of tech, results from retailers Home Depot and Lowe’s are due as the fourth-quarter earnings season winds down. Investors will also assess President Donald Trump’s State of the Union speech on Tuesday.
While the tech sector has struggled, the index has been supported by market movements in sectors such as energy, industrials and consumer staples.
“It’s kind of a confusing market,” Norton said. “Everything that worked in 2025 is now difficult in 2026. And what was left behind in 2025 is working in 2026.”
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