It's not just about NVDA anymore, according to analysts at Bank of America on Monday, with the firm stating that fundamentals are broadening out.

BofA notes that Nvidia (NASDAQ:NVDA) takes center stage this week, reporting earnings on Wednesday, May 22.

"The bar has been high this earnings season, especially for Tech, and our Semi analyst sees more volatility ahead," wrote the investment bank. "But it's not just about NVDA anymore."

The bank feels that AI benefits are broadening to power, commodities, and Utilities. They also believe that fundamentals are broadening, and so should the market.

"NVDA drove 37% of S&P earnings growth over the LTM (and 11% of return), but is expected to drive just 9% over the next 12 months," explains the bank. "Hyperscalers are in the first year of a multi-year AI investment cycle. Avoid capex growers."

Furthermore, BofA highlights that NVDA options are pricing in an 8.5% implied move for Q1 earnings, much lower than the reaction to three of the last five quarters.

Overall, BofA says stock reactions to earnings suggest that the bar is high this earnings season.

"Companies that beat on both sales and EPS outperformed the S&P 500 by just 30bps the next day, much lower than the historical average of 150bps," states the bank. "Conversely, companies that missed got penalized much more than usual, underperforming the S&P 500 by 350bps vs. the historical average of 240bps."

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