The most important stock market event of the year: How investors can protect themselves now from the Nvidia stress test – fear of the DeepSeek shock?

Crash or stock market boom? 3 scenarios for Nvidia stock – and what they mean for your portfolio

On Wednesday, February 25th, the financial world will hold its breath: Nvidia will present its highly anticipated quarterly figures after the US stock market closes. This is no longer just about the performance of a single chip manufacturer from California, but a fundamental stress test for global stock markets and the future of the global AI boom. Due to Nvidia's immense weight in leading indices like the S&P 500 and in countless ETFs, the impending price reaction will directly impact the portfolios of millions of private investors. Given already astronomical market expectations, new uncertainties arising from the Chinese AI startup DeepSeek, and the launch of the multi-billion-dollar Blackwell platform, the options markets are bracing for extreme volatility. We show why even very good figures could lead to a sell-off this time, which three market scenarios are now most likely, and how you as an investor – whether with individual stocks or broadly diversified global ETFs – can best keep a cool head during this historic nail-biting period.

Why is Nvidia's quarterly report causing tension worldwide?

Nvidia will release its quarterly results on Wednesday, February 25, after the US stock market closes. The conference call will begin at 11 p.m. Central European Time. This is about far more than just a single stock. The results will have a noticeable impact on indices, ETFs, and the portfolios of millions of private investors. The bar is set extremely high, and the reaction to the report could determine whether the AI ​​rally continues or stalls. For millions of investors, checking their portfolios on Wednesday night could be a nerve-wracking experience, as Nvidia's significance extends far beyond the company itself.

What makes Nvidia so special?

Nvidia is far more than just a traditional chip manufacturer. The company is considered a driving force behind investments in artificial intelligence worldwide. Data centers, cloud providers, and numerous software companies rely on the high-performance graphics processing units (GPUs) supplied by the California-based firm. Demand for these GPUs has exploded in recent years because they are considered indispensable components for the development and operation of AI applications. Accordingly, investors worldwide closely follow every signal emanating from the company. Evercore ISI even sees Nvidia as a rare generational opportunity, evaluating the company not only as a semiconductor corporation but as an entire ecosystem at the forefront of a new computing era.

Why can a single stock move entire indices?

Nvidia has grown so large that its stock alone has a noticeable impact on major stock market indices. Its weighting in the S&P 500 is over 7 percent, and in the Nasdaq 100 it's even over 13 percent. Reuters recently put its weighting in the S&P 500 at around 7.8 percent. Specifically, this means that if Nvidia's stock rises or falls significantly, ETFs and index funds automatically follow suit. This movement is thus reflected in the portfolios of investors who have never consciously bought a single Nvidia share. According to Statista data, Nvidia alone accounted for almost 20 percent of the S&P 500's annual return in the first ten months of 2025. Without Nvidia, the index's total return would have been around 14 percent instead of 17.5 percent. This enormous concentration means that the performance of the leading US indices is disproportionately dependent on the performance of this single heavyweight.

Why is Nvidia at the center of the AI ​​boom?

Nvidia supplies the chips that power many artificial intelligence applications. When major technology companies invest billions in new data centers, Nvidia directly benefits. The combined capital expenditures of Amazon and Alphabet alone are expected to exceed $380 billion this year. In the fourth quarter of fiscal year 2025, data center sales already accounted for 91 percent of total revenue. The crucial question, therefore, is: Will this surge in investment continue, or will customers become more cautious? If Nvidia confirms strong demand and provides a robust outlook, it will reinforce confidence in the continued momentum of AI. A more subdued outlook, however, could raise doubts about whether the boom will continue so strongly. The recent launch of the new Blackwell platform, in particular, has provided a significant boost, with Nvidia reporting $11 billion in Blackwell revenue in the first quarter of its availability alone.

Why are the markets reacting so sensitively right now?

The stock markets have repeatedly demonstrated this year how quickly sentiment can shift. Even minor deviations from expectations have recently led to significant price swings. In this environment, solid figures are often insufficient. Expectations are exceptionally high, and investor nervousness is palpable. The concern that the euphoria surrounding artificial intelligence and the associated enormous profits could go too far has shaken a key pillar of the record rally in the stock markets. Bundesbank board member Michael Theurer even warned of potential setbacks and a possible shock correction. Critics doubt that the hundreds of billions of dollars invested in AI data centers can be recouped in the foreseeable future. Added to this are new uncertainties in recent months from the Chinese AI startup DeepSeek, which raised doubts about whether ever more and increasingly expensive Nvidia chips are actually needed.

What specific expectations do analysts have for this quarter?

Analysts anticipate strong revenue and profit growth. For the past quarter, the fiscal fourth quarter, the consensus among analysts, according to the London Stock Exchange Group, is for revenue of approximately $65.9 billion. Goldman Sachs analyst James Schneider even forecasts $67.3 billion, roughly $2 billion above the market consensus. Earnings per share are expected to grow by around 71 percent, specifically, analysts predict adjusted earnings per share of $1.52, compared to $0.89 in the same period last year. For the coming fiscal year, analysts expect average earnings of $7.76 per share, with a range from $6.28 to $9.68. This clearly demonstrates that the market is not even in agreement on the stability of the demand curve. Bank of America has reiterated its buy recommendation with a price target of $275, citing Nvidia's dominant position in the AI ​​computing and networking markets.

What do the options markets say about expected volatility?

Options markets are pricing in significant volatility following earnings releases. The implied price movement is between 7 and 8 percent in either direction. Bloomberg data even shows an implied movement of 9.9 percent, the highest on a quarterly earnings day since 2022. Given Nvidia's market capitalization, this would equate to a shift of approximately $230 billion. That's a figure that exceeds the total market capitalization of many large corporations. Historically, however, the actual reactions haven't always been as dramatic as expected. In February 2025, the share price rose by 16.4 percent after the earnings release, while in November 2024 it only increased by 0.53 percent. This unpredictability makes it particularly difficult for investors to prepare for a specific scenario.

What market scenarios are conceivable after the quarterly figures?

Scenario 1: The AI ​​rally gets a new boost

If Nvidia significantly exceeds expectations and raises its forecast, it would be a strong signal that demand for AI chips remains high and investments are continuing as planned. In this case, not only would the stock likely rise, but other technology and chip stocks would also receive a boost. Statements regarding the $500 billion revenue forecast for the Blackwell and Rubin platforms by the end of 2026 could be particularly motivating for the market. A positive result could calm recently nervous investors and support the overall market. Investors who are betting on the AI ​​trend could be reassured by such a development and encouraged to maintain or increase their positions.

Scenario 2: Solid numbers, but without enthusiasm

This is perhaps where the greatest danger lies. Expectations have been exceptionally high for years. Marta Norton of the asset management firm Empower puts it this way: The expectation of above-average results for Nvidia has been a recurring theme in recent years. Therefore, it's difficult for Nvidia to surprise when everyone expects a surprise. The share price could thus fall despite good results if the figures don't significantly exceed forecasts. This very risk is also reflected in the assessments of analysts, who emphasize that even exceeding expectations is no guarantee of rising share prices. Market sentiment is fragile, and in such an environment, even a slightly disappointing outlook or a cautious comment from management can cause investors to take profits and the share price to fall.

Scenario 3: Significant disappointment

If the figures fall significantly short of forecasts or the outlook is noticeably weaker, the pressure is likely to increase considerably. Initially, this would affect AI and chip stocks, and then potentially broader indices. The most serious consequence would be if the market were forced to reassess the entire AI investment thesis. In an already nervous market environment, investors could become more cautious overall and reduce their risks. Experts like David Boole of BayCrest point out that a disappointment could even trigger months of volatile share prices. Such a scenario would have far-reaching consequences, not only for direct Nvidia investors, but for everyone invested in broadly diversified ETFs or index funds.

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How much does a price fluctuation affect private investors?

Many investors don't hold Nvidia shares directly, but are invested through global or technology ETFs. Nvidia is heavily weighted in numerous thematic ETFs, including semiconductor, AI, and metaverse ETFs. This means that a significant drop in Nvidia's share price can noticeably impact the performance of even these broadly diversified investment products. The key question for private investors is therefore: Would a 10 or 15 percent decline in Nvidia's share price significantly affect my portfolio? Those broadly diversified in a global equity ETF will feel the impact, but will generally be able to absorb it. However, those heavily invested in US technology should be aware of the potential fluctuations. ETFs focused on semiconductors or artificial intelligence are particularly vulnerable to Nvidia's share price movements. Past experience has shown that a single weak day for Nvidia was enough to significantly impact numerous ETFs.

Is this a short-term reaction or a structural problem?

Not every sharp price movement is automatically a warning signal. It depends on the underlying reasons. If revenue and the outlook continue to grow solidly, a short-term decline could be a market overreaction that corrects itself after a few days. The question is whether the fundamental drivers remain intact. Nvidia has consistently exceeded expectations in recent quarters. In the fourth quarter of fiscal year 2025, the company achieved record revenue of $39.3 billion, a 78 percent increase year-over-year. Net income rose 82 percent to $22.09 billion. As long as this momentum continues, the fundamentals suggest a temporary correction rather than a structural problem. However, if expectations are clearly missed and the outlook is lowered, the question arises whether the growth prospects are fundamentally deteriorating. Additional risks stem from potential export restrictions on AI chips to China and the question of whether the massive investments in AI infrastructure will actually generate adequate returns.

What should investors consider immediately before the earnings report?

The day before the earnings report isn't about being right or wrong. What matters is being prepared, regardless of how the market reacts. Investors should ask themselves some key questions. First: How heavily are they dependent on Nvidia and the technology sector? Those with a broadly diversified portfolio and a long-term investment horizon generally don't need to take action based on individual quarterly results. Large indices smooth out fluctuations in individual companies over time. Second: What is their risk tolerance? Investors who get nervous at a sudden 10 percent drop in their portfolio should perhaps reconsider their positioning before the results are released, not after. Third: Is my portfolio heavily concentrated in just a few tech stocks? In that case, a single quarterly result could have a disproportionate impact.

Why are decent numbers often not enough?

Expectations for Nvidia have risen steadily over the past few years. Many investors have already priced the strong results into the share price. RBC analyst Srini Pajjuri believes Nvidia is capable of exceeding market expectations by another three to four percent and anticipates order backlogs of over $500 billion for 2025 and 2026. However, this general optimism presents a paradox: when everyone already expects excellent results, the hurdle for a positive surprise is particularly high. Matt Orton, chief strategist at Raymond James, has already warned of significant volatility and emphasized that this pattern is repeating itself with Nvidia. The question on Wall Street is essentially: what could Nvidia announce that would send the share price soaring by another 20 percent in a single day? Until a convincing answer is found, the upside potential remains limited, while the downside risk increases.

What role will the Blackwell platform play in the future?

The new Blackwell platform is a crucial factor for Nvidia's continued growth. Investors are eagerly awaiting concrete statements regarding production and demand. Nvidia has already announced that its Blackwell supercomputers have been scaled up and generated $11 billion in revenue in the first quarter of availability. However, the gross margin in the data center business is something analysts are closely watching. According to Visible Alpha, the consensus gross margin for the data center segment in fiscal year 2026 has fallen by almost 300 basis points to 75.2 percent, indicating lower expectations. Potential delays in Blackwell production could put pressure on margins. Additionally, attention is already turning to the Rubin platform, whose production is slated to begin in the second half of 2026 and could reduce the cost of AI tokens to about one-tenth of the previous generation. Any statements from management regarding production capacity and expected delivery dates will be scrutinized by investors.

What does the DeepSeek debate mean for Nvidia?

The emergence of the Chinese AI startup DeepSeek has further fueled the debate surrounding Nvidia's future. DeepSeek has demonstrated that powerful AI models can potentially be trained with less computing power than previously thought. This has raised the question of whether demand for increasingly expensive and powerful Nvidia chips will remain as strong as anticipated. The DeepSeek effect has put significant pressure on Nvidia's stock at times and intensified the debate about a potential AI bubble. Simultaneously, there are concerns that the attention surrounding DeepSeek could prompt US authorities to impose further restrictions on the export of AI chips to China. Nvidia is already prevented from selling its most advanced chips to China and produces specially adapted versions for that market.

How should long-term investors deal with the situation?

In many cases, a simple rule applies: don't rush into anything. Long-term investors with broad diversification and a regular savings plan generally don't need to take action because of individual quarterly results. Large indices smooth out fluctuations of individual companies over time. However, investors should take a closer look if their portfolio is heavily concentrated in a few tech stocks or if their personal risk tolerance is low. In any case, it remains important not to make decisions based on initial impulse. Often, the situation becomes clearer after a few days. Historical experience shows that Nvidia has repeatedly exceeded expectations in the past. At the same time, however, it also shows that even with good results, the short-term share price reaction can be unpredictable. Those who are broadly invested and have a long investment horizon should not be tempted into hasty portfolio rebalancing based on individual quarterly results.

What is the biggest risk for investors in this environment?

The biggest risk lies not in the quarterly figures themselves, but in the combination of extremely high expectations and an already nervous market environment. The AI ​​rally has generated impressive returns in recent years. Nvidia's share price has risen by over 440 percent in the last two years. But this very success story has driven valuations to a level that leaves little room for error. If reality falls short of the priced-in expectations, a chain reaction threatens. First, AI and chip stocks could come under pressure, then broader technology indices, and finally, the nervousness could spread to other market segments. At the same time, it should be noted that the fundamental demand for AI infrastructure has remained intact so far. The major cloud providers continue to invest heavily in data centers. The question ultimately is whether the pace of investment can keep pace with the pace of share price expectations.

Which key performance indicators (KPIs) should be given particular attention when publishing?

Investors should pay close attention to several key metrics when the company releases its earnings report. First and foremost is revenue in the data center segment, as this represents the lion's share of the business and is a direct indicator of AI demand. Second, gross margins are crucial. Analysts expect margins to come under pressure with the introduction of new products like Blackwell, due to production ramp-up costs and rising storage costs. Third, management's outlook for the coming quarter and the full fiscal year is of central importance. Specific details regarding demand, production capacity, and delivery dates for Blackwell and Rubin will set the tone for the coming months. Fourth, it is worth examining the statements regarding China and potential regulatory risks. Any tightening of export restrictions could significantly impact growth prospects.

What happens if the outlook is positive?

Should Nvidia deliver a convincingly strong outlook, the impact could extend far beyond its stock. Such a signal would confirm that the multi-billion-dollar investments by major technology companies in AI infrastructure remain justified. This would likely not only support chip stocks but also boost the entire technology sector. Other companies in the supply chain, from memory chip manufacturers to data center equipment providers, would also benefit. In Germany, for example, Siemens Energy and Hochtief are considered beneficiaries of the AI ​​boom, as they provide infrastructure for data centers. A positive outlook could also help to at least temporarily dispel concerns about an AI bubble and strengthen investor confidence in the entire technology sector.

What lessons can be learned from previous quarterly reports?

Experience from recent quarters paints a mixed picture. Nvidia has consistently exceeded analysts' expectations in the past. In the fourth quarter of fiscal year 2025, earnings per share were $0.89, 5.95 percent above the forecast of $0.84. Revenue of $39.3 billion surpassed expectations by approximately 3.4 percent. In November 2025, Nvidia projected revenue of $65 billion for the fourth quarter, a forecast that also exceeded analysts' estimates of $61.66 billion at the time. Nevertheless, the share price reaction to these results has not always mirrored the respective financial success. Options markets have often overestimated volatility, and actual price movements have sometimes been significantly smaller than anticipated. This illustrates that short-term market reactions are difficult to predict, and investors would be wise to remain calm and collected.

What is the conclusion for the coming trading week?

Nvidia's quarterly report on February 25th is more than just a mandatory event on the quarterly earnings calendar. It's a stress test for the entire AI narrative on global stock markets. Expectations are incredibly high, valuations are ambitious, and the market environment is nervous. Anyone invested in broad indices or technology ETFs will feel the impact on their portfolio, whether they like it or not. The crucial question for investors isn't whether the figures are good or bad, but whether they are prepared for the consequences of both scenarios. Staying calm, understanding your portfolio structure, and avoiding impulsive decisions: these are the principles that could make all the difference in the coming days.

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