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Home.forex news reportNvidia Traders Brace for Potential $300 Billion Earnings Move

Nvidia Traders Brace for Potential $300 Billion Earnings Move

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(Bloomberg) — With Nvidia Corp. due to report an unusually complex quarter as the world’s most valuable company, traders are preparing for a potentially mammoth stock swing.

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The options-implied move for Nvidia shares the day after earnings is about 8% in either direction, according to data compiled by Bloomberg. That would equate to close to a $300 billion swing in market value — bigger than all but 25 companies in the S&P 500 Index. And according to strategists at Bank of America, the report carries more risk for the benchmark than the next Federal Reserve meeting or inflation data.

As the poster child of the artificial intelligence trade, Nvidia’s stock has rallied nearly 200% so far in 2024 and its reports have been the biggest event on the earnings calendar for more than a year. The shares fell 1.9% on Wednesday ahead of the chipmaker’s fiscal third quarter earnings, due after markets close, and there’s more uncertainty than normal about how the results and guidance will play out.

That’s because there are varying views on Wall Street about what to expect from the company’s newest product line, Blackwell. Nvidia has said that the new chips will contribute several billion dollars in revenue in the fiscal fourth quarter, while Chief Executive Officer Jensen Huang described demand for the chips as “insane.” But production delays have made modeling supply — a notoriously difficult task — even harder.

“There’s a big unknown around Blackwell capacity,” said Dan Eye, chief investment officer at Fort Pitt Capital Group. “The CEO has established a lot of credibility, but the bar is very high,” he said, adding that it will likely be challenging for Nvidia to give blowout guidance for next quarter.

The questions around Blackwell have led to a wide spread in analyst expectations for the fiscal fourth quarter that ends in January. Consensus is at $37.1 billion — with the gap between the highest and lowest projections at more than $7 billion, according to estimates compiled by Bloomberg. Nvidia typically provides revenue guidance for the upcoming quarter with its results.

Part of the reason for the gap in analyst forecasts is that some expect customers to delay purchases of Blackwell’s predecessor products, called Hopper, in anticipation of the newer chips.



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