NVIDIA Corp (NASDAQ: NVDA) is set to report earnings next week in what one analyst is calling a make-or-break moment for the broader market.
What Happened: Tuesday on CNBC's "Squawk Box," Deepwater Asset Management's Gene Munster highlighted the importance of Nvidia's upcoming quarterly report.
"As Nvidia goes, so goes AI, and so goes the Nasdaq," Munster said.
Nvidia is scheduled to report second-quarter financial results on Aug. 23. The chipmaker is expected to report earnings of $2.05 per share and revenue of $11.02 billion, according to estimates from Benzinga Pro.
The chip stock rallied on Monday after Morgan Stanley predicted Nvidia would beat estimates and raise guidance again this quarter. Munster believed it's all about the data center number, which is expected to come in at around $8 billion.
"If they exceed that, I think that's going to send the broader market higher," the Deepwater analyst said.
Munster told CNBC he agreed with the call from Morgan Stanley. He too expected Nvidia to deliver an upside surprise next week.
Why It Matters: At the end of June, the Nvidia CFO was on a call with Piper Sandler talking demand ahead of the company's quiet period prior to earnings.
A question came up about trade restrictions between the U.S. and China, Munster noted.
"Her response was, given the strength of demand across the globe, they're not worried about any sort of near-term issues related to trade," Munster recalled.
"That's a pretty powerful comment going into the quiet period and I think, ultimately, they are going to deliver on that."
Nvidia has been the biggest beneficiary of the AI boom to date. To put a fine point on that, Munster noted Nvidia's business is expected to be up 110% year-over-year this quarter. Arguably the next biggest AI player, Microsoft Corp (NASDAQ: MSFT), is expected to see growth of approximately 10%, he stressed.
"This is apples and oranges when it comes to leadership in AI," Munster said.
NVDA Price Action: Nvidia shares were up 2.25% at $447.25 at the time of publication Tuesday, according to Benzinga Pro.