Nvidia has become world's 'most important stock,' adding pressure to upcoming earnings report

For Nvidia investors, the past two years have been a joyride. But recently they've been on more of a roller coaster.

As the primary beneficiary of the artificial intelligence boom, Nvidia has seen its market cap expand by about ninefold since the end of 2022. But after reaching a record in June and briefly becoming the world's most valuable public company, Nvidia proceeded to lose almost 30% of its value over the next seven weeks, shedding roughly $800 billion in market cap.

Now, it's in the midst of a rally that's pushed the stock within about 6% of its all-time high.

With the chipmaker set to report quarterly results Wednesday, the stock's volatility is top of mind for Wall Street. Any indication that AI demand is waning or that a leading cloud customer is modestly tightening its belt potentially translates into significant revenue slippage.

"It's the most important stock in the world right now," EMJ Capital's Eric Jackson told CNBC's "Closing Bell" last week. "If they lay an egg, it would be a major problem for the whole market. I think they're going to surprise to the upside."

Nvidia's report comes weeks after its megacap tech peers got through earnings. The company's name was sprinkled throughout those analyst calls, as Microsoft, Alphabet, Meta, Amazon and Tesla all spend heavily on Nvidia's graphics processing units (GPUs) to train AI models and run massive workloads.

In Nvidia's past three quarters, revenue has more than tripled on an annual basis, with the vast majority of growth coming from the data center business.

Analysts expect a fourth straight quarter of triple-digit growth, but at a reduced pace of 112% to $28.7 billion, according to LSEG. From here, year-over-year comparisons get much tougher, and growth is