Investors in Nvidia (NVDA. O) are anticipating higher-than-estimated quarterly revenue forecasts from the chip designer when it releases its results on Wednesday. Nvidia has been a leading beneficiary of the growing popularity of ChatGPT and other generative artificial intelligence apps, all of which rely on its graphics processors. This year, Nvidia's shares have tripled in value, resulting in a market valuation of over a trillion dollars. The soaring stock price leaves little room for any disappointment in earnings, as it could potentially trigger a decline in the stock. The company's Q3 revenue is expected to rise around 110% to $12. 50 billion, as per Wall Street predictions.

At least 10 brokerages have recently increased their price targets for Nvidia's shares. Analysts will closely watch the sales performance of Nvidia's data center unit, which houses its prized H100 chip used in AI, to determine if the stock's valuation can be justified. Additionally, there are concerns about growth, particularly related to demand from China amid worries of potential export restrictions. Rival company AMD poses a challenge to Nvidia with its M1300X chip, which could be 50% cheaper and capture 10% of the AI chip market next year. However, Nvidia's software CUDA has established itself as the industry standard in AI, giving the company a significant advantage.