Nvidia Corp. is facing a significant stock decline as it heads into reporting its fiscal fourth-quarter results on Wednesday. The chip giant's shares were down 6.2% on Tuesday, risking their largest single-day percentage drop since December 27, 2022. The potential market capitalization loss of $112 billion would be the largest in Nvidia's history, surpassing a $56 billion decline seen earlier in the year.

Analysts from HSBC, such as Frank Lee, have noted that Nvidia's stock rally of over 35% this year has raised overall market expectations significantly, with consensus earnings approaching forecasted levels. Despite expectations for stellar numbers from FactSet analysts, including adjusted earnings per share of $4.59 and revenues of $20.4 billion for the fourth quarter, there are concerns about the high bar set for Nvidia's performance.

Market analysts like Jordan Klein from Mizuho and Harsh Kumar from Piper Sandler are cautious about Nvidia's future performance, citing challenges due to elevated expectations. While Kumar anticipates strong data-center revenue forecasts, Klein believes a downward stock movement may outweigh any potential gains. Analysts also speculate on the impact of new chips developed for China and the potential revenue growth in the upcoming quarters.

Investors, such as Joseph Moore from Morgan Stanley and Srini Pajjuri from Raymond James, are cautiously optimistic about Nvidia's performance. Moore expects conservative revenue guidance from Nvidia despite speculation of exceeding $25 billion in quarterly revenue. Pajjuri is positive about Nvidia's B100 product and the increasing demand for AI processing power, which could drive the company's growth in the near term.

Nvidia's performance in the upcoming earnings report will be closely watched by investors amid concerns of meeting high market expectations and the impact on the company's stock value.