Nvidia prepares to release its quarterly results as AI fears weigh on the stock market

Artificial intelligence chipmaker Nvidia on Wednesday will deliver a quarterly report likely to sway a jittery stock market as investors weigh whether the massive bets riding on technology's latest craze will pay off.

As has been the case since Nvidia's chipsets emerged as AI's best building blocks, the expectations are sky high for the results covering the company's fiscal quarter, covering November through January.

Industry analysts are projecting Nvidia's revenue for that period will total $66.1 billion, a 68% increase from the previous year, while its profit is being forecast to rise at an even more robust pace of more than 70%, according to FactSet Research.

Nvidia has regularly cleared the bar set by analysts during the past three years, often by a wide margin, but that hasn't always been enough to satisfy investors who have become increasingly skeptical about whether AI will live up to all the hyperbole surrounding the technology.

After Nvidia delivered a stellar performance that far exceeded analyst forecasts in its last quarterly report and CEO Jensen Huang hailed “off the charts” demand for the company's latest AI processors, its stock price still fell by 3% during the next day's trading.

The fervor escalated another notch during the past month as four companies leading the AI charge — Amazon, Microsoft, Google parent Alphabet and Facebook parent Meta Platforms — collectively made commitments to spend about $650 billion this year ramping up their AI computing power.

A significant amount of the money is expected to be earmarked to buy more Nvidia chips required to power AI factories, just as has been the case for much of the past three years as the company's annual revenue soared from $27 billion to more than $200 billion.

The phenomenal growth transformed Nvidia from an under-the-radar chipmaker valued at less than $400 billion at the end of 2022 to an AI bellwether now valued at nearly $4.7 trillion. The run-up has turned Nvidia into a market-moving force, with its stock accounting for roughly 7% of the benchmark S&P 500 as well as a major factor in both the closely watched Dow Jones Industrial Average and tech-driven Nasdaq composite index.

Last October, Nvidia briefly became the first company to surpass a $5 trillion market value before the doubts shadowing AI pulled its stock price back from a peak that it hasn't approached so far this year.

But sentiments could shift quickly if Wednesday's quarterly report provides evidence that Nvidia is building the momentum that will enable the Santa Clara, California, company to increase its annual sales by another $100 billion this year, as analysts surveyed by FactSet Research. Analysts, on average, also believe Nvidia's stock price could approach $260 this year, which would catapult the company's market value beyond $6 trillion.

FILE - A sign to a Nvidia office building is shown in Santa Clara, Calif., Wednesday, May 31, 2023. (AP Photo/Jeff Chiu, File)

COLOMBO, Sri Lanka (AP) — Police in Sri Lanka arrested the country's former intelligence chief in connection with suicide bomb attacks in 2019 that killed nearly 270 people and were believed to be inspired by the Islamic State group, a spokesman said.

Suresh Salley, a retired army major general, was arrested Wednesday by the country's Criminal Investigation Department, police spokesman Fredrick Wootler said.

Two Islamist groups carried out six nearly simultaneous suicide bomb attacks on April, 21, 2019, which targeted churches and leading tourist hotels on Easter Sunday. Videos recorded by the attackers showed them pledging allegiance to the Islamic State group.

The attacks shook the island nation and revived memories of a 26-year civil war with the Liberation Tigers of Tamil Eelam, widely known as the Tamil Tigers, a separatist group that fought to create an independent state for the country’s ethnic Tamil minority.

Salley was a highly respected military intelligence official credited with a large role in ending the war in 2009. The CID is investigating possible “links or lapses” by Salley in connection with the 2019 attacks, Wootler said.

Following the bombings, allegations surfaced that the attackers had links with Sri Lanka's state intelligence.

In 2023, Britain's Channel 4 interviewed a man who said he arranged a meeting between Salley and a local group known as National Thowheed Jamath, which was inspired by the Islamic State group. The meeting prior to the bombings allegedly hatched a plot to create insecurity in Sri Lanka and enable former President Gotabaya Rajapaksa to win the presidential election later that year.

The man in the Channel 4 program, Azad Maulana, was a spokesperson for a Tamil Tigers breakaway group that later became a prostate militia and helped the Sinhalese-dominated government defeat the rebels.

After security camera footage of the bombings was released, Maulana said he recognized the faces of the attackers as the people he had arranged to meet with Salley.

Sri Lanka's defense ministry has denied any involvement.

FILE -Sri Lankan police officers secure the area of exploded St. Anthony's Church on Easter Sunday attacks in Colombo, Sri Lanka, April 28, 2019. (AP Photo/Eranga Jayawardena, File)