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Nvidia investors expect volatile moves in the stock after the company reports earnings.
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Traders are pricing in a swing of $300 billion, or an 8% swing, according to options data compiled by Bloomberg.
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All eyes will be on the company’s future guidance for Blackwell, its next-generation AI chip.
Nvidia investors are bracing for volatile moves in Nvidia shares after the chip titan reports third-quarter earnings, with markets pricing in an 8% stock swing following the results, according to data compiled by Bloomberg.
The swing would imply a gain or loss of $300 billion in market value. The stock’s total market capitalization was $3.5 trillion as of 10:30 a.m. Tuesday.
The chipmaker, which is expected to report profits after the closing bell, fell 1.8% on Tuesday morning, with traders seeing little room for error as it is the world’s largest company by market capitalization around record highs.
Investors expect the company to report third-quarter revenue of $33 billion, which would represent an 83% increase from the same quarter last year.
In particular, all eyes will be on the company’s guidance for Blackwell, with Wall Street looking for clues as to how strong demand will be for the next-generation GPU.
In October, Huang described the demand for Blackwell as “crazy.”
Nvidia could be on track to exceed its earnings revenue by $2 billion, and the company could be on par to reach a valuation of $4 trillion or higher by 2025, strategists at Wedbush Securities said in a note on Wednesday .
“Blackwell represents the next frontier for Nvidia and the overall AI revolution and we believe The Street continues to vastly underestimate the demand curve over the next twelve to eighteen months and beyond. The cloud metrics and AI data points from Redmond, Amazon and Google were robust. during last month’s earnings season, as this indicates a surge in demand for AI for businesses is now underway,” the company wrote.
“Starting in the fourth quarter, Nvidia’s new Blackwell GB200 GPU will dominate sales for years to come,” added Louis Navellier, the chief investment officer of Navellier & Associates. “Given that Nvidia spent approximately $2 billion developing the Blackwell GPU, it has no competitors, and as it develops even more powerful GPU successors to Blackwell, I don’t expect any competitor to ‘crack’ Nvidia’s monopoly on generative AI. “
However, some forecasters are concerned that Nvidia shares could fall even if the company beats earnings due to skyrocketing investor expectations. That’s what happened after the last quarterly report, with Nvidia stock experiencing a short sell-off despite strong overall results.
“Once again, Nvidia stock is priced for perfection heading into earnings, as has been the case for nearly all of the company’s earnings reports in recent history,” Clark Bellin, the chief investment officer of Bellwether Wealth, said in a note Wednesday . “For investors who don’t own Nvidia, it may be best to wait for a pullback rather than establish a position in this name when the stock is near record highs,” he added later.
Read the original article on Business Insider
