Nvidia earnings preview and stock movement: Will NVDA stock crash or rally after earnings? Nvidia set for a record $320 billion move as options predict 7% swing
Nvidia Earnings Could Lead to Record Market Swing of $320 Billion
The predicted move of nearly 7 percent comes as investors wait to see whether the AI boom that has powered Nvidia’s meteoric rise is accelerating or cooling down, according to the report.
A Reuters analysis found that the options-implied change represents a record-breaking one-day change in Nvidia’s current valuation of about $4.6 trillion, according to the report.
Over the past 12 quarters, Nvidia shares have moved an average of 7.3% the day after earnings, according to ORATS data, according to a Reuters report. A currently implied shift in scale would surpass the company’s previous record move, a $276 billion jump after February 2024 results, Reuters reported.
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Artificial Intelligence Under Scrutiny as Investors Await Nvidia Results
Nvidia has become a central force in the AI investment wave, with graphics processing units dominating the market for training large language models and other AI systems, an influence that has increased the risks associated with each quarterly update, according to the report. “Nvidia’s impact goes well beyond the dollar swing,” said Chris Murphy, co-head of derivatives strategy at Susquehanna. “As the mainstay of AI capex trading, its results will help define whether we are in the next leg of expansion.” or enter digestion mode,” Reuters quoted him as saying. READ ALSO: Anthropic AI deal announced: Microsoft and Nvidia’s bet on Claude that goes beyond OpenAI – here’s the investment breakdown
Nvidia’s 8% Weight in S&P 500 Adds Broader Market Risk
Nvidia’s results, which have a roughly 8% weight in the S&P 500 Index, are expected to be reflected in the broader market, Reuters reported. “The signal it sends – on-demand, margins, supply chain and investment posture – can shape sentiment across semi-terms, hyperscalers and AI infrastructure in general,” Murphy said. “So while the stock could move plus or minus 7%, the narrative impact could spread across $10 trillion worth of associated transactions, as quoted in the report.”
Tech Stocks Pull Back Ahead of Nvidia’s Earnings
According to the report, the technology sector has pulled back in recent sessions due to concerns about whether artificial intelligence-driven stock gains can continue. Nvidia shares have fallen nearly 10% since hitting a record high in late October, despite rising nearly 38% for the year, Reuters reported.
Investor Exits Increase Pressure on NVDA Ahead of Quarterly Results
Investors will scan Nvidia’s earnings for any signs that demand in the sector that has powered markets in recent months is slowing. The stock also came under pressure following news that several major investors, including Peter Thiel’s hedge fund and SoftBank, exited their positions, as reported by Reuters.
What Nvidia’s Earnings Could Mean for Future AI Spending Trends
“As a significant component of the S&P 500, its results will likely carry broader impacts on business investment and AI-related spending trends,” said Jason Pride, chief investment strategy and research officer at Glenende, as quoted in the report.
FAQ
Is a 7 percent post-earnings move normal for Nvidia?
Yes. Nvidia usually moves around 7% after earnings, but this time the amount is much larger due to the huge valuation.
Why is Nvidia influencing the entire stock market?
It makes up about 8% of the S&P 500, so any big move in Nvidia impacts the major indexes.
