Prediction: May 21 Will Be a Huge Day for the Stock Market. Here's What You Need to Know.

Many things have guided the S&P 500 in recent years, from the pace of interest rate cuts to news about President Donald Trump's import tariffs, and most recently, progress on negotiations to end turmoil in Iran. But one of the biggest drivers of market performance is linked to something that's seen as the next big thing in technology -- likened to the internet, or to go back in time, to the printing press or steam engine.

I'm talking about artificial intelligence (AI), a technology that could transform our daily lives and the way companies operate. The intended result is greater efficiency and more innovation -- all of this and more could supercharge corporate earnings growth. So, investors have been particularly tuned in to companies that may benefit from this revolution. They include developers of AI products and services as well as companies using AI.

Certain companies within this space have seen their stocks soar over the past few years as they've reported revenue growth thanks to the AI boom. And this has set the pace for the S&P 500, particularly since many AI companies are heavily weighted in the index.

With this in mind, my prediction is that May 21 will be a huge day for the stock market as something big is set to unfold a day earlier, after the stock market closes. Here's what you need to know.

Image source: Getty Images.

What's happening on May 20?

So, what's set to happen on May 20 after the closing bell? Nvidia (NASDAQ: NVDA) is scheduled to report first-quarter earnings for the 2027 fiscal year. The company, as the AI chip leader, has set the tone for AI stocks and growth stocks in general in recent years. Nvidia has its finger on the pulse of the AI market as it communicates with cloud players and customers throughout industries -- from healthcare to automotive players. So the chip giant has a clear idea of what's ahead as this AI story unfolds.

Nvidia shares this information as it releases earnings, offering details about demand for compute and how customers are using AI. For example, in recent quarters, Nvidia has talked about how inference is becoming the new growth driver for AI as customers apply the technology to their needs.

All of this offers investors visibility on Nvidia's business moving forward, of course, but also on the prospects for many other AI companies. That's why, if you're an investor in tech stocks, it's key to tune in for the Nvidia report.

Concerns that have weighed on the market

It's important to note that while any potential negative news from the company surely would hurt tech stocks, positive news hasn't always led to gains. This is because, in recent times, other concerns have weighed on the market. For example, during the past two Nvidia reports, the market was preoccupied with concerns about AI stock valuations and turmoil in Iran. That said, if external news is light this week, my prediction is Nvidia's announcement could clearly offer the market direction.

Regarding the earnings report, here's what you need to know. Nvidia has forecast a 77% increase in revenue year-over-year to $78 billion, and the company expects gross margin to top 74%. It's likely the tech giant will offer details about demand for its Vera Rubin system, on track for release later this year.

One key point to watch is any comments on future sales to China. Though the U.S. gave Nvidia the nod for the export of certain chips to the country earlier this year, China hasn't yet allowed their importation. Nvidia chief Jensen Huang joined Trump and a delegation of U.S. executives on a trip to China last week to meet with Chinese President Xi Jinping. Progress here clearly could boost Nvidia shares and the stocks of chip peers, too.

Finally, tech investors should listen in for possible comments about how AI may interact with other technologies moving forward, from software to quantum computing. Any messages showing AI as supportive of these technologies may lift shares of companies specializing in those areas. For example, Nvidia recently released AI models specifically to support quantum computing development.

Information from Nvidia on all of these points, and more, could set the pace for Nvidia stock and others in the months to come -- and that's why my prediction is May 21, the first trading session after Nvidia's earnings report, could be a big day for the stock market.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.