By Saqib Iqbal Ahmed
NEW YORK (Reuters) – Options traders are poised for a nearly $300 billion swing in Nvidia’s (NVDA) market value after the chipmaker’s quarterly results on Wednesday, U.S. options market data showed.
Nvidia’s options implied an 8.5% swing for the stock in either direction after the results, which will be reported after markets close, according to data from options analytics service ORATS.
This is in line with previous percentage movements following the results over the past twelve quarters. But now that the AI chipmaker’s market cap has grown to $3.44 trillion, the projected swing in its market value is nearly the largest ever, at about $292 billion.
A move of that magnitude would wipe out the market cap of about 95% of S&P 500 stocks.
Post-earnings moves in Nvidia’s stock generally fell short of market expectations. Bigger-than-expected moves, however, leaned to the upside, according to ORATS founder Matt Amberson.
Of the last twelve quarterly earnings reports, five post-earnings moves were outside the market’s expectations. All of those have seen their stock prices rise, Amberson said.
Christopher Jacobson, a strategist at Susquehanna Financial Group, wrote Monday that traders assign a slightly higher probability to an excessive move to the upside than to the downside.
The results for the chipmaker – which is at the heart of the generative artificial intelligence boom – could be a key factor in determining the market trajectory. Investors are turning their attention to Nvidia after the post-US election rally has stalled in recent days.
The S&P 500 is up 23% this year, despite falling last week.
“The market will extrapolate whatever Nvidia says to the entire AI business,” Nancy Tengler, CEO and chief investment officer at Laffer Tengler Investments, said in a note.
Nvidia has exceeded Wall Street’s high revenue expectations for the past eight quarters. But with analysts expecting a slower pace of growth, how the company overcomes delays and supply chain issues will likely be a key factor for its stock price.
The chipmaker is expected to report an 82.8% increase in revenue to $33.13 billion in the third quarter, according to data compiled by LSEG.
On Monday, Nvidia shares fell 1.3% to $140.15. This year, the stock is up about 180%, making it one of the top performers in the S&P 500 index.
(Reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili and Rod Nickel)
