Nvidia is set to report its quarterly earnings after the closing bell Wednesday with investors fretting about lofty AI valuations.

Wall Street shares have seen big swings this week as investors brace for all-important earnings from AI bellwether

Not as expensive as it used to be, based on one widely watched valuation measure—the price-earnings ratio. While Nvidia's stock price has soared, its earnings power has risen even quicker, pushing down the PE ratio.

Viewed through that lens, Nvidia looks compelling. But there are real risks.

Wall Street bounced back from this week's earlier losses on Wednesday, ahead of the latest earnings report from Nvidia, considered a bellwether for the artificial intelligence sector.

Nvidia stock is up 3.2% at $187.16 in morning trading, bucking a downward trend heading into its third-quarter report. Shares are down 6.4% in the week leading up to this report, marking their worst pre-earnings performance since February 2024 when shares fell 8.

The U.S. stock market fell following another jarring day on Tuesday, as worries keep dogging Nvidia, bitcoin and other Wall Street stars that their prices shot too high. After quickly sliding to a morning loss of 1.