Nvidia is set to report earnings next week that could impact the AI sector. Analysts expect the chipmaker to surpass expectations and raise its outlook due to increased spending from big tech companies. Markets have been shaky amid concerns about the sustainability of AI spending growth.

Nvidia’s upcoming earnings report is highly anticipated, with analysts from Jefferies and Wedbush predicting a positive outcome. The company’s stock closed 2% higher on Friday, with a 42% gain since the start of the year, outperforming the S&P 500.

The performance of Nvidia in its quarterly earnings can significantly affect the stock prices of companies in the AI sector. Wedbush analysts noted that much of the spending from hyperscalers like Microsoft, Alphabet, and Amazon is directed towards Nvidia due to its pivotal role in the AI server market.

Despite Nvidia’s success, some investors and analysts are questioning the sustainability of AI spending by major tech companies. Market participants are wary of signs of a potential bubble. Bank of America analysts expect Nvidia to address concerns around AI spending and meet high earnings expectations.

Nvidia is expected to report adjusted earnings per share of $1.26 on revenue of $55.28 billion, a significant increase from a year ago. Data center revenue is projected to grow by 61%, contributing $49.53 billion to Nvidia’s total revenue.

Read more at Yahoo Finance: Why These Wall Street Experts Expect Big Things From Nvidia’s Earnings Report Next Week