Chip giant Nvidia will report fourth-quarter earnings results after the close today, Matt writes.

Why it matters: Nvidia is easily the biggest single story in the stock market over the last year. Its business — once built around chips tailored to gaming consoles — has been transformed by demand from data centers at the heart of the AI boom.

The numbers: Nvidia's sales, profits and market value have all exploded over the last year.

• In Nvidia's third quarter — which ended in October — profits hit $9.2 billion, up an insane 1,259% from Q3 2022.
• Sales tripled to $18.1 billion.
• Over the last year, the company's market value soared by more than $1 trillion, to about $1.7 trillion. That puts Nvidia roughly even with Amazon and Alphabet in terms of capitalization heft, and third behind Microsoft and Apple.

Reality check: As of Friday, roughly 30% of the S&P 500's gain for the year was attributable to Nvidia, according to Howard Silverblatt, an S&P analyst.

Yes, but: As yesterday's market-moving drop showed, there's no guarantee the stock's ride will continue.

• It's possible that the already high expectations reflected in the stock price — up more than 200% in the last 12 months — mean almost any result will be a source of disappointment.
• In fact, the stock stumbled hard yesterday, dropping 4.4%, its steepest one-day drop since October.

What they're saying: Based on what the big spenders in the world of AI — Microsoft, Meta, Alphabet and Amazon among them — have been saying about their capital expenditure plans, analysts expect big numbers from Nvidia after the close of trading.

• "Forward-looking commentary on Gen-AI-related capital spending was consistently positive across all major U.S.-based hyperscalers," Goldman Sachs analysts said.

What to watch: The key question for the stock appears to be whether sales and profit growth continue at the neck-straining, upward angle that Nvidia has reported over the last couple of quarters. Or, it may begin to show signs of flattening, albeit at a new cruising altitude few could have conceived of a couple of years ago.

• Traders appear to be ready for fireworks. The Wall Street Journal reports that the options market is pricing in an 11% swing — either an 11% gain or an 11% loss — in the share price after it reports through Friday.

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If the Department of Justice decides to challenge the acquisition of Discover by Capital One on antitrust grounds, new research from the Consumer Financial Protection Bureau will surely play a prominent role in the complaint, writes Axios' Felix Salmon.

Why it matters: Even though some 4,000 banks offer credit cards, the top 10 issuers, including both Discover and Capital One, account for more than 80% of loans.

• That concentration seems to have given the biggest lenders the ability to jack up the interest rates they charge on outstanding credit card balances.

The big picture: Consumers with poor credit who have a credit card from a small bank are paying a lower interest rate on their purchases than consumers with excellent credit who carry a card from Discover, Capital One, or one of the other big banks.

• Credit card interest rates have risen sharply over the past two years, spiking from 14.6% in February 2022 to 21.5% in November 2023.

By the numbers: An American who runs an average balance of $5,000 will end up paying between $400 and $500 a year in excess interest payments if they go with one of the big banks.

• On top of that, a holder of a credit card issued by a big bank is three times more likely to be paying an annual fee than someone with a card from a small bank.

What's happening: The biggest banks have massive marketing operations and credit-card reward programs, which make it hard for smaller banks to compete even when their interest rates are much more attractive.

The bottom line: If this deal goes through, Capital One would become the largest credit card issuer in America, with a 19% market share. (JPMorgan currently leads the ranking, with a 16% share.)

• For consumers, however, it's far from clear that bigger means better.

Capital One's main argument to antitrust authorities will be that it's going to give Discover the scale it needs to become a serious competitor to Visa and Mastercard.

Why it matters: The big question is whether that argument is going to even pass the laugh test, Felix writes.

The big picture: Visa and Mastercard are pure-play card networks with extremely strong international brands and enviable pricing power.

• Discover, by contrast, is a card issuer, a bank, and a card network all rolled into one. All three of them together are worth $35 billion to Capital One — which means the card network, on its own, is worth just a fraction of that price.
• Visa and Mastercard are behemoths in comparison, both valued at over $400 billion. They have little to fear from Discover, especially since now all banks that aren't Capital One will be even more reluctant to issue cards on the Discover network.

The bottom line: The Discover network will be valuable to Capital One, which says it's likely to save $1.2 billion per year by switching its own debit cards over to the Discover network. But don't expect Discover to become a true Visa competitor.