Here's Why Nov. 19 Could Be a Very Important Day for the Stock Market

Both the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq-100 are weighted by market capitalization, meaning the largest companies in each index have a greater influence over their performance than the smallest.

Nvidia (NASDAQ: NVDA) has a market capitalization of $4.6 trillion, making it the world's largest company. It has an 8% weighting in the S&P 500 and a whopping 14% weighting in the Nasdaq-100, so a sharp move in its stock has the potential to shift the entire market. Plus, given the company's dominant standing in the artificial intelligence (AI) industry, many other large tech stocks tend to follow its lead.

On Nov. 19, Nvidia will release its operating results for its fiscal 2026 third quarter (ended Oct. 31). If the company's revenue, earnings, and forward guidance either exceed or fall short of Wall Street's expectations, a significant move in its stock price could follow. Therefore, what happens next Wednesday could influence the direction of the broader market for the remainder of this year. Read on.

Image source: Nvidia.

Supplying the world's best AI chips

A substantial amount of computing power is required to develop AI models, which is typically delivered through centralized data centers. Nvidia's graphics processing units (GPUs) have become the go-to data center chips for AI workloads by consistently setting the benchmark in terms of performance.

Nvidia's H100 GPU, which was designed on its Hopper architecture, earned the company a 98% market share in 2023, as it was the most powerful chip for developing the large language models (LLMs) that power AI software. However, leading AI companies like OpenAI, Anthropic, and Meta Platforms (NASDAQ: META) have moved onto "reasoning" models, which spend more time thinking in the background to weed out errors, thus generating much better outputs.

Nvidia CEO Jensen Huang says reasoning models consume up to 1,000 times more tokens (words and symbols) than traditional LLMs, so they require significantly more computing power. The company's Blackwell Ultra GPU architecture delivers exactly that, and it has extended the chipmaker's dominance in the data center space. The Blackwell Ultra GB300 chip offers up to 50 times more performance than the H100, and demand is heavily outstripping supply right now.

Investors will be looking for an update on GB300 sales on Nov. 19, and they will be listening closely to how Huang describes the demand picture. Additionally, some investors may be eager for an update on Nvidia's Rubin architecture, which is slated for release next year. According to early reports, it could offer 3.3 times the performance of Blackwell Ultra, which would translate to a whopping 165 times better performance than Hopper.

Wall Street expects another blockbuster quarter

Nvidia forecasted $54 billion in revenue for the fiscal 2026 third quarter, which would be a 54% jump from the year-ago period. Based on previous quarters, around 90% of that figure is likely to come from the company's data center segment, which is where it accounts for sales of its AI GPUs.

Wall Street's consensus estimate (provided by Yahoo! Finance) suggests Nvidia also generated earnings of around $1.25 per share during the quarter. Companies are typically valued based on their earnings, so this number could heavily influence Nvidia's stock price after Nov. 19 (I'll discuss this further in a moment).

Another thing Wall Street will be watching on Nov. 19 is Nvidia's forward guidance. Analysts are looking for a revenue forecast of $61.3 billion for the fourth quarter (which ends on Jan. 31, 2026), so if management issues a bigger number, it could be a sign that GPU demand will be higher over the next few months than originally expected. That would be bullish for Nvidia stock.

How might Nvidia stock perform after Nov. 19?

Short-term moves in any stock are often just noise, so investors should always focus on the long term for the best results. That is especially true for a company like Nvidia because it's powering the AI revolution, which could be a multitrillion-dollar opportunity over the next several years.

With that said, Nvidia released its last earnings report on Aug. 27 (for its fiscal 2026 second quarter), and its stock has climbed by 7% since then. That doesn't sound like much of a gain considering the blistering returns Nvidia's shareholders are accustomed to, but the stock is heading into Nov. 19 at an attractive level. That could set the stage for significantly more upside.

Nvidia's price-to-earnings (P/E) ratio is 53.5 as I write this, a 12% discount to its 10-year average of 61.2. But it gets better, because Wall Street expects the company's earnings to grow to $6.68 per share in fiscal 2027 (which starts in February 2026), placing the stock at a forward P/E ratio of just 28.1:

NVDA PE Ratio data by YCharts. PE Ratio = price-to-earnings ratio.

In other words, assuming Wall Street's estimate proves to be accurate, Nvidia stock will have to soar by a whopping 90% over the next 12 to 18 months just to maintain its current P/E ratio.

In summary, Nvidia's upcoming earnings report on Nov. 19 could set a positive tone for the broader stock market in the short term, but investors should stay focused on the longer run, because that's when the real potential gains are likely to come.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.