Nvidia Corp. (NVDA) is poised to make history with its upcoming earnings report, as market analysts predict a record-breaking $300 billion swing in its share price. This unprecedented movement would dwarf any previous earnings-related shift in the stock market.
Options pricing data reveals that traders are anticipating a substantial 9.8% move in Nvidia’s shares on Thursday, the day after the earnings report is released. This prediction, derived from ORATS data, surpasses any previous anticipated move for Nvidia’s reports over the past three years and outpaces the stock’s average post-earnings movement of 8.1% during the same period.
Considering Nvidia’s massive market capitalization of approximately $3.11 trillion, a 9.8% swing would translate to nearly $305 billion. This potential shift would eclipse the market capitalization of 95% of S&P 500 companies, including prominent names like Netflix and Merck, according to data from LSEG.
The options pricing data suggests that traders are more concerned about missing a significant upside move in Nvidia’s stock than experiencing a substantial drop. According to an analysis of options data by Susquehanna Financial, traders assign a 7% chance to the stock rising more than 20% by Friday, while only a 4% probability is assigned to a more than 20% sell-off.
Steve Sosnick, chief strategist at Interactive Brokers, highlights the sentiment behind this bullish expectation: “Ahead of earnings, people typically want to buy hedges, they want to buy insurance, but in Nvidia’s case, a lot of that insurance is FOMO insurance. They don’t want to miss a rally.”
Nvidia’s earnings report could serve as a leading indicator for the performance of the technology and semiconductor sectors. Analysts are forecasting that Nvidia will report second-quarter revenue of $28.68 billion, marking a significant increase from the $13.5 billion recorded in the same period last year.
A Goldman Sachs note further reinforces the anticipation of a substantial market move, suggesting that Nvidia’s stock might experience a $298 billion market value fluctuation following the release of its second-quarter earnings report. This potential swing is based on the company’s $3.17 trillion market capitalization.
The market’s fervent interest in Nvidia’s earnings report reflects the company’s prominent position in the rapidly evolving technological landscape. As one of the world’s most valuable companies, Nvidia is a key player in the development of artificial intelligence (AI) and high-performance computing, driving innovation in areas like gaming, data centers, and autonomous vehicles.
The upcoming earnings report is therefore expected to provide valuable insights into the trajectory of these key technological sectors and could potentially set the tone for the broader market in the coming months.
