Wall Street has great expectations for Nvidia ‘s earnings on Wednesday, according to Evercore ISI. Yet, how the artificial intelligence darling’s stock will react is less clear — and it is likely to have big implications for the entire stock market, the firm said. “The worst kept secret in Corporate America is that when NVDA … reports 1Q24 earnings after the market closes on 5/22 that the company will beat EPS and revenue consensus expectations ($5.63/share and $24.6 billion respectively) handily,” Julian Emanuel, the firm’s senior managing director of equity, derivatives and quantitative strategy, said in a note Sunday. “The near term share price reaction is more difficult to gauge, even as the game changing long term productivity implications of the AI Revolution remain crystal clear,” he added. NVDA 1Y mountain Nvidia’s one-year performance The stock price reaction is complicated by several factors, including the recent “Animal Spirits” that have been stirred up in the market with the meme stock trades , Emanuel explained. At the same time, volatility remains low, with the Cboe Volatility Index , or VIX, around 12, and the S & P 500 trading at a “very lofty” 23.5 times last-twelve-month earnings, he said. On top of that, the latest Census Bureau survey of American businesses’ AI uptake fell slightly to 4.7% against a base case expected rate of 6.4%, he wrote. “We are confident that EVR ISI’s end-2025 base case of 25% AI adoption will crystallize, but as in many things, the long term is a series of volatile short terms,” Emanuel said. “The present ‘kink in the curve’ is one of these volatile moments.” The share price reaction will likely cause a ripple effect, he said. Over the past year, Nvidia’s stock has had an “almost unimaginably close” day-to-day correlation to the S & P 500 of 0.95, he pointed out. A beta of 1.0 means a security is perfectly correlated with the broader market. “Given NVDA’s past earnings reactions — the 5/23 and 2/24 surges, and the 8/23 ‘so what?’ which helped catalyze 2023’s S & P 500 Fall Fall … the one certain thing is that NVDA’s share price reaction, while difficult to gauge, will have consequences for the S & P 500 as a whole,” Emanuel said. “It always does.”