Nvidia Earnings Report Expected to Cause $300 Billion Swing in Market Cap
The upcoming earnings report from Nvidia is causing a stir in the U.S. equity options market, with traders anticipating a more than $300 billion swing in the company’s market capitalization. According to data from analytics firm ORATS, options pricing indicates that traders are expecting a move of around 9.8% in Nvidia’s shares following the earnings report on Thursday.
This expected move is larger than any Nvidia report over the last three years and well above the stock’s average post-earnings move of 8.1% during that same period. With Nvidia’s market capitalization standing at about $3.11 trillion, a 9.8% swing in the shares would translate to approximately $305 billion, making it likely the largest expected earnings move for any company in history.
The implications of Nvidia’s earnings report go beyond just the company itself. Known for its widely-used chips in artificial intelligence, Nvidia’s performance can have a significant impact on the broader market. The stock has already surged by 150% year-to-date, accounting for around a quarter of the S&P 500’s 18% gain over the same period.
Traders in the options market are showing more concern about missing out on a large upside move from Nvidia rather than a steep decline. Options data analyzed by Susquehanna Financial shows a 7% chance of the stock rising more than 20% by Friday, compared to a 4% probability of a sell-off of the same magnitude.
Part of the reason for the large expected move in Nvidia’s shares is the company’s history of volatility. Nvidia’s average 30-day historical volatility this year is about twice that of all other companies with market caps higher than $1 trillion. This volatility in the stock is reflected in the options pricing, as traders try to position themselves for potential swings in the share price.
Overall, the anticipation surrounding Nvidia’s earnings report reflects the uncertainty and optimism surrounding the company’s role in the AI market, as well as its widespread popularity among both institutional and retail investors. Keep an eye on Nvidia’s earnings report for potential market-moving developments.
By Saqib Iqbal Ahmed
Extreme Investor Network
ExtremeInvestorNetwork.com