The tech giant Nvidia, which designs the world’s most advanced computer chips, reports second quarter results later on Wednesday. For many investors, it’s a must-watch event. 

Tech investors are not greeting each other with the standard “Good morning, how ya doin’?” this week. Instead, it’s more like:

“Happy Nvidia week,” said Gil Luria of financial services firm D.A. Davidson. “It’s the biggest week of the quarter, every quarter now.”

There are Super Bowl-like watch parties for Nvidia results calls. The chip designer is the most valuable publicly traded firm on earth. 

“Nvidia sits at the center of AI,” said Brian Colello, a tech analyst at Morningstar.

He said the Amazons, Microsofts, and Open AIs of the world all rely on chips designed by Nvidia.

“Every developer touches Nvidia in some way,” said Colello.

Which is why the firm, all by itself, makes up 8% of the entire S&P 500 market cap.

“The amount of growth and profits that we've seen out of NVIDIA over the last several years has just been astonishing,” said Stacy Rasgon, an analyst with Bernstein Research. “I’ve never seen anything quite like it and I’ve been doing this job almost 20 years.”

The company has faced some headwinds, though, said Rasgon, particularly of the geopolitical variety. Dating back to 2022:

“Various levels of export restrictions have been placed on their parts, specifically for shipments into China,” Rasgon said.

This month, the Trump administration allowed Nvidia to sell certain chips to China, but only in exchange for the U.S. government taking a 15% cut of the revenue. Across the Pacific, there are concerns too.

“The Chinese government is concerned about maybe some of the security issues tied to these chips,” said Angelo Zino of CFRA Research.

China has speculated there could be some kind of back door, allowing remote access to the chips. Nvidia denies that. Zino said Nvidia’s fate hinges on how this trade spat shakes out.

“It's very important for Nvidia to sell into China because half of the world's developers are actually in China,” said Zino.

Closer to home, said Gil Luria of D.A. Davidson, the limit on Nvidia’s sales doesn’t have to do with the chips themselves, but rather with where they ultimately end up.

“The bottlenecks now have to do with being able to put up a warm data center in order to plug in the chip,” Luria said.

He said tech firms can’t seem to build data centers fast enough. In part because of the grid-straining amount of electricity needed to run the computers and keep them cool. 

“The computations are so intense that if you don't cool them, they will melt the wires,” Luria said.

Which is why, Luria says, the next big thing in AI is better HVAC.