Nvidia’s profit report next week could steer the U.S. stock market’s course, as investors seek confirmation that the AI-driven investment trend, which has powered equities for two years, is intact after last month’s panic-selling triggered by the Chinese startup DeepSeek.

Seen as a bellwether of the burgeoning AI industry, Nvidia is the world’s second most valuable company, with a 6.3% weight on the S&P 500, according to LSEG. Its shares have skyrocketed over 550% over the last two years.

A recent stumble, however, came after the Chinese startup DeepSeek unveiled a lower-cost AI model that was seen as a threat to the dominance of U.S. rivals, driving Nvidia down roughly 17% on January 27, equivalent to $593 billion – a record one-day market value loss.

Shares have almost fully recovered from the tumble and the company said DeepSeek’s advances prove the need for more of its chips, but apprehensive investors fear earnings could revive some market turbulence.

“It’s a tough setup going into the conference call next week because there is some anxiety of wanting to kind of call the top on Nvidia. So I would not be surprised to see rotation and fairly violent market reaction under any circumstance,” said Mike Smith, Allspring’s head of growth equity team.

He said investors could rotate out of AI trades into sectors such as healthcare, software and financials.

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