Live Markets-Nvidia to put finishing touches on banner U.S. earnings season

Nvidia NVDA.O reports next week after Wednesday's close, the last key release in a much-stronger-than-expected second-quarter U.S. earnings season.

Results are in as of Friday from 465 of the S&P 500 .SPX companies. Including companies that have reported along with estimates for the rest, year-over-year earnings growth for the quarter is now seen at 51.9%, the highest since 2021, according to LSEG data.

But Tajinder Dhillon, head of earnings and equity research at LSEG Data & Analytics, notes S&P 500 earnings growth is at 33.5% on an adjusted basis from a year ago, also the highest since 2021, when earnings rebounded from the start of the pandemic. That figure excludes mark-to-market gains from both Alphabet GOOGL.O and Amazon.com AMZN.O, he says.

Still, some 85% of reports are beating analysts' earnings expectations versus 80% over the last four quarters, according to LSEG data.

Peter Cardillo, chief market economist at Spartan Capital Securities in New York, notes that Nvidia is "a bit of a bellwether." He adds that "earnings season went extremely well, and if (Nvidia does) come out and beat, that could only be a plus."

(Caroline Valetkevitch)

Some of the strongest growth for the quarter has come from semiconductor companies, and investors remain focused on AI-related investments.

In its latest announcement, Nvidia on Friday said it has made a minority investment in privately held Cloverleaf Infrastructure to develop infrastructure to power AI data center projects across the U.S.

"AMD's a close No. 2 as far as the AI trade within semiconductors, and their earnings were strong, very, very strong," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.