Traders expect a significant move for Nvidia’s shares after its earnings report on May 22. However, US options markets show more muted volatility expectations.
Nvidia’s options are primed for an 8.7 per cent swing in either direction by Friday, according to data from options analytics firm Trade Alert. That would translate to a market cap swing of US$200 billion – larger than the market capitalisation for about 90 per cent of S&P 500 companies.
The implied move is much smaller than Nvidia’s 16.4% jump after the last earnings report. It is also less than the 12% average move of the past eight quarters.
“Volatility and expectations had been a fair amount higher the last time around,” said Chris Murphy, co-head of derivative strategy at Susquehanna Financial Group.
Nvidia, up about 87 per cent this year, is seen as a bellwether of the burgeoning artificial intelligence (AI) industry and has a market value of about US$2.3 trillion, making it the third-largest company on Wall Street, behind Microsoft and Apple. Wall Street is betting on a blowout quarterly report from Nvidia.
Investor interest has spread out to other beneficiaries of the AI theme in recent months.
Transitioning to the specifics, Nvidia’s earnings announcement is a crucial event for shareholders. Analysts forecast varied outcomes, predicting both upward and downward swings in Nvidia’s stock price. This anticipated volatility stems from uncertainties surrounding factors like chip demand, supply chain issues, and macroeconomic trends, contributing to the expected Nvidia Earnings Swing.
In the aftermath of Nvidia’s earnings report, market sentiment is likely to fluctuate, causing an Nvidia Earnings Swing. Traders will analyze the earnings data to gauge Nvidia’s financial health and future prospects. Depending on the earnings outcome, Nvidia’s stock could experience significant price movements, impacting investor portfolios and market indices.
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