Nvidia Corporation (NASDAQ: NVDA) is set to release its first-quarter earnings report on Wednesday, with its performance and potential guidance holding significant influence not only over its stock but also other assets tied to the AI investing boom. Interactive Brokers (IBKR) emphasizes that Nvidia's quarterly report could impact the broader market, specifically the copper industry and utility sector ETFs.

With expectations of triple-digit growth in both earnings and revenue for Q1, Nvidia has become a major player in the AI market. The company's stock has surged approximately 90% in 2024, reflecting investors' optimism about Nvidia's AI prospects. However, IBKR Chief Strategist Steve Sosnick warns that any signs of weakness in Nvidia's report could have far-reaching consequences.

"If [NVDA] can continue their enviable, remarkable string of beating estimates, raising guidance, then beating the raised guidance next quarter, that means that the AI trade can and will proceed apace," Sosnick stated in a note. He added, "If there is even the slightest sign of weakness, however, much more than that stock alone will suffer."

Interestingly, the skyrocketing price of copper, hitting record highs, is believed to be linked to the current AI-mania. Sosnick highlights the recent surge in the Utilities Select Sector SPDR ETF (XLU) and utility funds' significant inflows, indicating the connection between the demand for copper and the widespread corporate adoption of generative AI.

"The utilities would, of course, be the ones to supply it - hence the excitement about those stocks. And if utilities need to build new capacity, that will require copper wiring - hence the demand for the commodity," explained Sosnick. Copper futures (HG1:COM) have already risen around 18% in the past month and approximately 30% year-to-date.

The S&P 500 Utilities sector has experienced a remarkable year, shifting from the worst-performing sector to the third-best, with a 14% increase in 2024. However, Sosnick raises doubts about the rapidity of these price movements, emphasizing that building new power plants and infrastructure takes time and will not occur overnight.

Nvidia's Q1 report will not only shed light on the company's performance but will also have a ripple effect on the AI market, copper industry, and utility sector. Investors and industry observers are eagerly awaiting the results to determine the future trajectory of these interconnected sectors.

Disclaimer: The above article is purely informational and does not constitute financial advice. Please conduct your own research and consult with a professional advisor before making any investment decisions.