Here are the 3 big things we're watching in the stock market for the week ahead
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CNBC Finance
9 min read
Here we go again: Nvidia earnings week is upon us. The world's most valuable company and the leading maker of artificial intelligence chips will deliver first-quarter earnings on Wednesday night. Of course, it will drive a ton of the action on Wall Street this week. But it's certainly not the only thing on our radar. A pair of other Club holdings also reports. Plus, Google has a hotly anticipated developer conference, where we expect AI updates to be on display. Here's a closer look (all revenue and estimates are via LSEG): 1. Retail earnings: Home Depot kicks off our week of Club earnings on Tuesday morning. Analysts at Morgan Stanley put it well in a note last week, saying the U.S. housing market "continues to bounce along the bottom." So, we aren't expecting to see an inflection point in Home Depot's results because mortgage rates and housing activity just haven't cooperated. The upshot is that the stock has been crushed since February, when the 30-year fixed mortgage rate started climbing higher, and now trades at multiyear lows. That means expectations for Home Depot's results are low. Wall Street expects Home Depot's same-store sales growth in the first quarter to be 0.8%, according to FactSet. When Home Depot reported Q4 results in February, it was just a few days before the start of the Iran war, which has muddied the economic backdrop and rekindled inflation. However, analysts at Bernstein said they do not expect Home Depot to revise its full-year guidance of flat to 2% same-store sales growth, as the forecast "contemplated a wide range of scenarios." Bernstein also said Home Depot's SRS Distribution subsidiary may benefit from storm-related repair activity in the quarter, so we'll look to see whether that proved true. Home Depot acquired SRS in 2024 as part of an aggressive push to court professional contractors who rely on wholesale distributors. It also just finalized the acquisition of an HVAC distributor. The rise in inflation has made it tougher for incoming Federal Reserve chief Kevin Warsh to cut interest rates quickly. But we're hanging on to Home Depot because, at some point, the housing market has to wake up. Revenue: $41.53 billion EPS: $3.41 Fellow retailer TJX Companies is up next on Wednesday morning. The big difference here is that the economic environment actually plays into TJX's hands as a retailer known for offering quality merchandise at great prices. If you're feeling strained by high gas prices but need a new pair of jeans, few places are better to go than T.J. Maxx or Marshalls. For that reason, we expect TJX to be relatively well-positioned to continue attracting shoppers. Consensus is for same-store sales growth of 4.1% in the quarter, and we want to continue seeing an increase in transactions driving that result. One thing to watch will be TJX's forward commentary on freight costs. In recent quarters, TJX's margins had benefited from declining freight rates. But they've gone the wrong way because of the Iran war. Overall, we remain confident in TJX as a worthy long-term stock, which is why we bought more shares on Friday. Keep in mind, when it comes to guidance, TJX executives like to underpromise and overdeliver. Revenue: $13.98 billion EPS: $1.01 2. Nvidia earnings: Now for the main event on Wednesday night. A "beat and raise" is the minimum requirement. That means Nvidia's reported results need to beat consensus, and its guidance for the current quarter needs to exceed expectations, prompting analysts to raise their estimates. This has been the bar for years now. And with Nvidia shares finally breaking out of a monthslong slumber to new highs, it certainly remains the case this time around. One problem Nvidia continues to confront: even when its results are great, some investors remain worried about the sustainability of the greatness. So, anything CEO Jensen Huang and CFO Colette Kress can do on Wednesday night to alleviate concerns that the investment cycle may soon slow will be key to the stock's reaction to the release. The market will also be listening to commentary on Nvidia's visibility into the $1 trillion sales forecast that Huang issued in March at its splashy GTC conference. That covered sales of its Blackwell and Rubin systems starting last year through 2027. No doubt, Nvidia faces growing competition in the AI chip space both from fellow graphics processing unit (GPU) maker Advanced Micro Devices and custom silicon providers like Broadcom and Marvell , which work with large tech companies to design specialized chips. But we want to hear Huang tackle this head-on and discuss energy efficiency and total operating cost compared to the competition. Away from technology debates, another topic we've seen in Wall Street preview notes last week is capital returns to shareholders. Nvidia is flush with cash and has a lot more coming in as orders are fulfilled. As a result, many analysts want an update on Nvidia's plans to return some of it to investors â perhaps via a dividend boost or a major increase in its share repurchase authorization. Nvidia currently pays out a quarterly dividend of 1 cent per share, resulting in a microscopic yield of 0.02%. It paid out $974 million in dividends in its fiscal year 2026, which ended in January. On the buyback, Nvidia repurchased $40.09 billion worth of stock last fiscal year and had $58.5 billion remaining under its share repurchase authorization. A big number, for sure. But this is a company worth $5.56 trillion, so as a percentage of market capitalization, it's about 1%. We're not sure what our preferred approach is to stepping up capital returns. On the one hand, a dividend raise signals confidence in the sustainability of demand. On the other hand, getting the yield to anything that would expand the shareholder base to attract income-seeking investors would mean committing to annual payouts that could otherwise be used for research and development or more strategic investments and acquisitions (we know Nvidia has been busy ). Consider that, to reach a 2% dividend yield on a $5.56 trillion company, Nvidia would need to ship north of $100 billion annually. That yield would certainly be respectable, and it's doable with the free cash flow Nvidia generates â projected to be $182 billion this fiscal year and even higher in the next two after that, according to FactSet. But, at some point, we have to consider the sheer dollar amount. That is a ton of money to commit to sending out annually. Sure, Nvidia could pare back later on if it thinks it needs the cash, but a dividend cut is almost always taken as a negative signal of future demand. A much larger buyback, meanwhile, would return cash, increase future per-share earnings by reducing the share count, and not require the team to deliver future payouts beyond the authorization amount. It would not, however, attract income-oriented value investors in the way a larger dividend could. In any case, it's a fascinating debate, and we'll find out soon enough whether Nvidia takes action either way. Revenue: $78.67 billion EPS: $1.76 3. Google event: Alphabet hosts its annual I/O developer conference on Tuesday and Wednesday. Bank of America analysts said it could strengthen Google's AI positioning. But with expectations elevated, they warned that "the lack of a 'wow' announcement could pressure the stock." Rumors are flying that Google will unveil or tease its Gemini 4 AI model â and that's a big deal because the introduction of Gemini 3 in November was a huge success and sent shares rallying . Another thing we're watching is how Google weaves AI into all of its other offerings, which can help alleviate concerns about the return on its massive spending. In particular, we're looking for updates on new agentic AI capabilities â AI systems capable of executing tasks and taking action without human intervention. Additionally, robotics, AI wearables like smart glasses, and the broader rollout of Waymo will also be of interest. Also on Wednesday, Alphabet will host its Google Marketing Live event, which is important to monitor for commentary on AI monetization and new advertising tools. Investors are always looking for more clues that traditional Google Search is still growing despite AI model adoption. The good news is that queries are already at an all-time high, CEO Sundar Pichai said on the company's first-quarter earnings call, saying AI usage is actually driving Google Search usage. Google's in-house TPU chips are key to its AI efforts, but since the company just unveiled the eighth-generation family at a Google Cloud event in late April, we have low expectations for any major silicon news. Week ahead Monday, May 18 Before the bell: Baidu (BIDU) Tuesday, May 19 Pending home sales at 10 a.m. ET Before the bell: Home Depot (HD) , Vertiv (VRT), Amer Sports (AS), KE Holdings (BEKE), Bilibili (BILI) After the bell: Keysight (KEYS), Toll Brothers (TOL), CAVA (CAVA) Wednesday, May 20 Federal Open Market Committee meeting minutes at 2 p.m. ET Before the bell:Â TJX Companies (TJX), Target (TGT), Analog Devices (ADI), VF Corp (VFC), ZIM Integrated (ZIM), Lowe's (LOW), Arcos (ARCO), Hasbro (HAS), Baozun (BZUN) After the bell: Nvidia (NVDA) , Intuit (INTU), Urban Outfitters (URBN) Thursday, May 21 Initial jobless claims at 8:30 a.m. ET Housing starts at 8:30 a.m. ET S & P Global Flash U.S. PMI at 9:45 a.m. ET Before the bell: NIO (NIO), Deere (DE), Walmart (WMT), Advance Auto Parts (AAP), NetEase (NTES), Vipshop (VIPS) After the bell: Deckers (DECK), Take-Two (TTWO), Workday (WDAY), Zoom (ZM), Copart (CPRT), Ross Stores (ROST) Friday, May 22 University of Michigan consumer sentiment survey (final) at 10 a.m. ET Before the bell: Booz Allen Hamilton (BAH), BJ's (BJ) (Jim Cramer's Charitable Trust is long NVDA, HD, TJX and GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
