Aug 26 Reuters Nvidia is likely to report on Wednesday that its secondquarter revenue more than doubled. But investors used to its blockbuster results will be expecting even more from the artificial intelligence chip giant.

A beat or a miss on Wall Street expectations could either stoke or shatter an AI rally on Thursday, a day after Nvidia reports earnings for the MayJuly period.

The company39;s shares have surged more than 150 this year, adding 1.82 trillion to its market value and lifting the SP 500 to new highs.

The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker.

Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia39;s powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in presentday datacenters, which has sharply boosted Nvidia39;s fortunes.

Nvidia is expected to have recorded a yearoveryear jump of about 112 in secondquarter revenue to 28.68 billion, according to LSEG data as of Aug. 23.

But its adjusted gross margin likely dropped more than 3 percentage points to 75.8 from the first quarter, burdened by the cost of a production rampup to meet growing demand.

They39;re not only a benchmark for chips, but they39;re also a benchmark for AI as a whole, said Daniel Morgan, senior portfolio…