NEW YORK – Traders in the U.S. equity options market are bracing for an anticipated swing in Nvidia’s upcoming earnings report. Expectations are high for a more than $300 billion shift in shares for the AI chipmaker. With options pricing indicating a potential 9.8% move in the company’s shares post-earnings, analysts are closely monitoring the implications of such a significant fluctuation.
Based on projections from analytics firm ORATS, this expected move surpasses any previous Nvidia report in the last three years. It also exceeds the stock’s average post-earnings shift of 8.1% over the same period. With Nvidia’s market capitalization at approximately $3.11 trillion, a 9.8% swing equates to about $305 billion – a staggering figure that could make history as the largest anticipated earnings move for any company.
While investors are eagerly awaiting the outcome of Nvidia’s report, the broader market is also set to feel the impact. The company’s chips are widely regarded as the gold standard in artificial intelligence, contributing significantly to its 150% year-to-date stock increase, which accounts for approximately a quarter of the S&P 500’s overall gain of 18%.
Options pricing reveals a sentiment among traders leaning towards a potential upside move for Nvidia, rather than a downside risk. Analysts indicate a 7% probability of the stock rising more than 20% by Friday, compared to a 4% likelihood of a similar decline. This “fear of missing out” insurance, as described by experts, showcases the bullish outlook many traders have towards Nvidia’s performance.
The heightened expectation for such a substantial move in Nvidia’s shares can be attributed to the company’s historical share price volatility. Compared to other companies with market caps exceeding $1 trillion, Nvidia’s average 30-day historical volatility this year is twice as high. This ongoing uncertainty surrounding AI technology and the vast opportunities it presents, in addition to Nvidia’s prominent position in the institutional and retail investor landscape, contribute to the fervent market activity surrounding the stock.
As traders gear up for Nvidia’s earnings release, the anticipation for a significant shift in the stock’s performance underscores the intense focus on this key player in the tech sector. The outcome of Nvidia’s report is poised to not only impact the company itself but also send ripples throughout the broader market, setting the stage for a potentially historic event in the world of finance.