NEW YORK (Reuters) -Turbulence in technology stocks could ratchet higher in the coming week as investors react to the quarterly report from Nvidia Corp ( NVDA ), the world's largest company by market value that is at the heart of Wall Street's artificial intelligence trade.

On Thursday, the benchmark S&P 500 equity index gave up gains from earlier in the week, as uncertainty about the economic outlook and path for U.S. interest rates undercut optimism over the end of the longest-ever U.S. government shutdown.

Investors remained skittish about vulnerability to technology shares, which stumbled this month on concerns AI exuberance has driven up valuations to expensive levels.

With its AI chips, semiconductor giant Nvidia ( NVDA ) has been a bellwether for the theme that has lifted shares of an array of tech names as well as other companies involved in the vast infrastructure expansion to support AI use. 

Nvidia ( NVDA ) is the "epicenter" of the build-out of AI, so its results after the bell on Wednesday will be important to the tech sector as well as areas such as industrials and utilities, said Matt Orton, chief market strategist at Raymond James Investment Management. 

"If you don't see the growth that I think the market is expecting around Nvidia ( NVDA ) or the positive commentary that we are likely to get from Nvidia ( NVDA ) going forward, I think you're going to see more of a dent to those sorts of trades," Orton said.

Nvidia ( NVDA ) shares have soared about 1,000% since the launch of ChatGPT in November 2022. This includes a year-to-date gain of nearly 40% that made Nvidia ( NVDA ) the first company to surpass $5 trillion in market value last month.

That market heft means the stock's moves can sway equity indexes. Nvidia ( NVDA ) carries an 8% weight in the S&P 500 and a roughly 10% weight in the widely followed Nasdaq 100.

Analysts on average expect the company to post a 53.8% year-over-year rise in fiscal third quarter earnings per share, on revenue of $54.8 billion, according to LSEG.

Analysts have also been getting more bullish about the company's future performance, with expectations for the company's fiscal 2027 revenue rising 15% since late May to about $285 billion currently, according to LSEG data.

"The assumptions that the market is making are positive, it's getting priced into the stock, and how the company guides will be very important," said Melissa Otto, head of research at S&P Global Visible Alpha.

Investors will also focus on commentary from Nvidia ( NVDA ) related to demand or spending trends. Capital expenditures from hyperscalers such as Microsoft ( MSFT ) and Amazon ( AMZN ) earlier in the reporting season indicated no signs of slowing in the build-out of data centers and other AI infrastructure.

"You're not supposed to have any weakness given all the capital spending commitments from various companies," said Jimmy Chang, chief investment officer of Rockefeller Global Family Office. "Demand should still be looking pretty solid in the current environment."

Nvidia's ( NVDA ) report is one of the biggest remaining market catalysts in 2025. The S&P 500 is logging a roughly 15% year-to-date gain, but Wall Street is wary of concerns stocks are in an "AI bubble."

Investors appear to be bringing more scrutiny to AI investment announcements, said James Ragan, co-CIO and director of investment management research at D.A. Davidson.

"We're moving into a stage where investors are going to demand a little bit more proof of concept in terms of what are the returns, what are the cash flows," Ragan said.

Aside from Nvidia's ( NVDA ) results, quarterly earnings from retailers are due in the coming week including from Walmart ( WMT ) and Home Depot ( HD ). There could also be a batch of economic data releases that were delayed during the shutdown.

While the S&P 500 tech sector has struggled so far this month, other sectors are logging solid gains in that time, including healthcare, materials and financials.

"There's a realization that for investors, maybe that AI is not the only game in town," Ragan said.