NVIDIA’s Earnings Report Expected to Shake Up the Market with $300 Billion Price Swing
Daniel Kim Views
Traders in the U.S. options market expect significant price swings of over $300 billion following NVIDIA’s upcoming earnings report, which is set for tomorrow.
According to data from the analysis firm ORATS, options pricing suggests that NVIDIA’s stock might move by about 9.8% the day after the earnings announcement, as reported by Reuters on the 27th. If this prediction holds, it would represent the highest expected volatility for any NVIDIA earnings report in the past three years.
NVIDIA’s stock is currently valued at around $3.11 trillion. A 9.8% change in its stock price would amount to roughly $305 billion, potentially marking the largest fluctuation in history.
As a leading player in the AI chip industry, NVIDIA’s performance significantly impacts the overall market. The company’s stock has surged about 150% this year, contributing around 25% to the S&P 500’s 18% increase.
Consequently, options traders are more concerned about missing out on potential gains from a price increase than about losses from a decline. Typically, traders seek to hedge against losses ahead of earnings reports, but in NVIDIA’s case, they are experiencing FOMO (Fear of Missing Out).
Reuters analyzed that NVIDIA’s average 30-day historical volatility this year is nearly double that of other companies with market capitalizations over $1 trillion.
On the day of the report, NVIDIA’s stock closed at $128.30, up 1.46% from the previous day, after a 2.25% drop from the day before.
NVIDIA’s stock rise boosted the Philadelphia Semiconductor Index, which tracks semiconductor-related stocks, by 1.10%.
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