NVIDIA Corp (NASDAQ: NVDA) is set to release its earnings report, and options traders are anticipating a significant shift in the company’s stock. The U.S. equity options market is buzzing with speculation about NVIDIA’s upcoming earnings report, which could potentially trigger a substantial movement in the stock, according to Reuters.
Data from options analytics service ORATS suggests that NVIDIA’s shares, which have already surged by approximately 50% this year, could experience an 11% swing in either direction following the quarterly results on February 21. This projected move is the largest expected shift in NVIDIA’s shares before an earnings report in the last three years, surpassing the stock’s actual average earnings move of 6.7% over the same period.
Should this prediction materialize, it would result in a potential market value swing of about $200 billion, surpassing the market capitalization of chipmaker Intel Corp and exceeding the market values of approximately 90% of S&P 500 constituents.
Despite the substantial increase in the stock, demand for upside options bets on NVIDIA remains strong. The stock’s 90-day 25 delta call skew, a measure of sentiment, is near a five-year high, indicating that investors still see the potential for significant upside.
“The elevated call skew tells us that investors still see the potential for significant upside despite the move already made and that there is significant demand for upside exposure as some who may be fearful of the high volatility turn to upside calls for lower-risk exposure,” said Christopher Jacobson, a strategist at Susquehanna Financial Group.
The anticipation surrounding NVIDIA’s earnings report comes amid a period of intense market activity. Some market experts suggest that the market may have reached a peak for the year, with NVIDIA’s stock being a prime example of the current market dynamics.
NVIDIA’s recent achievements, such as surpassing Google-parent Alphabet Inc as the third most valuable U.S. company and its ongoing AI advancements, have contributed to the company’s soaring market value and investor confidence. Additionally, NVIDIA’s recent investment in Arm Holdings and other AI companies has been seen as a strategic move to solidify its position in the AI industry, potentially driving further growth and impacting its stock performance.
Overall, the upcoming earnings report for NVIDIA is generating significant interest and speculation among options traders. The potential for a substantial shift in the stock’s value has attracted attention, and investors continue to show strong demand for upside options bets. As the market remains dynamic, all eyes will be on NVIDIA and its earnings report to see how it influences the company’s stock and the broader market.
