Options traders are anticipating a potential $300 billion market cap swing in Nvidia‘s (NVDA) value, following the company’s quarterly earnings announcement set for Wednesday after the bell.
The data from options analytics service ORATS – via Reuters – indicates that Nvidia options are pricing in an 8.5% movement in either direction for the shares post-earnings. This percentage aligns with Nvidia’s historical post-earnings volatility over the last twelve quarters. However, given Nvidia’s current market capitalization of $3.44 trillion, such a move translates to an approximate $292 billion change in value, marking one of the largest anticipated shifts ever for a single company’s earnings report.
This potential volatility underscores Nvidia’s significant impact on the market, with the expected swing surpassing the total market cap of 95% of the companies within the S&P 500. Historically, Nvidia’s stock movements post-earnings have generally been less dramatic than anticipated, but when they have exceeded expectations, the movements have predominantly been upward, according to Matt Amberson, the founder of ORATS.
Nvidia has consistently surpassed Wall Street’s revenue forecasts for eight consecutive quarters, fueled by its pivotal role in the artificial intelligence sector. However, the current consensus among analysts, as compiled by LSEG, points towards a slower growth trajectory, with third-quarter sales expected to surge by 82.8% to $33.13 billion. This expectation comes at a time when the company faces challenges like delays and supply chain issues, which could significantly influence investor sentiment and the stock’s price movement.
On the day prior to the earnings release, Nvidia’s shares experienced a slight decline, closing down 1.29% at $140.15. Despite this, the stock – as of time of this writing, up 2% at $142.94 – has been a standout performer in 2024, with gains of about 183%, contributing to its status as one of the leading stocks in the S&P 500 index. The anticipation around Nvidia’s earnings reflects not just on the company’s performance but also on the broader tech sector’s health and future direction.
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