Nvidia Earnings Set to Test European Tech Rally as AI Spending Doubts Mount

Nvidia Earnings Set to Test European Tech Rally as AI Spending Doubts Mount

When Nvidia reports earnings Wednesday after market close, European semiconductor and infrastructure stocks face their clearest test yet of whether the AI investment boom can sustain its momentum—or whether the recent Big Tech capex jitters signal a broader slowdown.

The chip giant's results matter because "Nvidia's earnings are widely viewed as a barometer for the strength and durability of the global AI investment cycle," according to Camilla Papaleo, product manager at VanEck. For European finance chiefs watching their tech portfolios, that makes Wednesday's report more than just another earnings call. It's a referendum on whether the massive AI infrastructure buildout continues at its current pace or begins to normalize.

The stakes are particularly high given what's already happened this earnings season. Results from Google, Meta, Microsoft and Amazon triggered a selloff despite strong numbers, with investors spooked by the hyperscalers' massive capital expenditure plans for AI infrastructure. The market's message was clear: we're worried about how long companies can keep spending at this rate without clearer returns.

Nvidia's guidance will either validate that concern or dismiss it. If the company signals continued strong demand for its next-generation chips, sustained data center expansion, and robust customer capex plans, it could lift European tech stocks—particularly in semiconductors and infrastructure, Papaleo told CNBC. Those sectors have become increasingly tied to the AI buildout, with European chipmakers and equipment suppliers benefiting from the same data center boom that's driven Nvidia's valuation to make it the world's most valuable company.

But the alternative scenario carries real risk. If Nvidia suggests growth is beginning to normalize or that customers are "digesting earlier purchases," it could trigger what Papaleo describes as "a broader reassessment of AI-driven" valuations across the sector. That's the outcome European tech CFOs are quietly preparing for—the possibility that the hypergrowth phase is ending and a more measured expansion is beginning.

The timing is awkward for European tech companies that have been riding Nvidia's coattails. Many have positioned themselves as enablers of the AI infrastructure boom, and their valuations reflect expectations of continued exponential growth. A signal from Nvidia that demand is moderating—even if still growing—could force a rapid repricing.

What makes this earnings report particularly consequential is Nvidia's unique position as both a bellwether and a driver of AI spending. When the company reports strong demand, it doesn't just reflect what's happening in the market—it influences what happens next, as customers rush to secure chip allocations and competitors accelerate their own infrastructure plans.

For European finance leaders, Wednesday's report will answer a question that's been hanging over the sector since the Big Tech selloff: was that market reaction a temporary panic about near-term spending levels, or the beginning of a fundamental reassessment of AI investment timelines? Nvidia's guidance on customer demand and future chip generations will provide the clearest answer yet.