Nvidia set for $320 billion price swing after earnings, options indicate

By Laura Matthews and Saqib Iqbal Ahmed

NEW YORK (Reuters) -Nvidia's earnings report on Wednesday could trigger a $320 billion swing in the chipmaker's market value — the largest post-earnings move ever for the AI giant — as investors seek signals about whether the artificial intelligence boom is accelerating or cooling.

Nvidia options implied about a 7% move for the stock in either direction after it announces its quarterly results, which are expected following the market close on Wednesday, data from analytics firm Option Research & Technology Services (ORATS) showed.

At Nvidia's current market value of about $4.6 trillion, the options-implied move would represent the largest one-day market value change following quarterly earnings for the artificial-intelligence bellwether, a Reuters analysis found.

On average, the stock has logged a move of 7.3% the day after reporting results over the last 12 quarters, ORATS data showed. It would surpass the $276 billion jump in market value the company logged following quarterly results in February 2024.

The chipmaker has become a focal point for investors seeking exposure to the AI boom, with its graphics processing units dominating the market for training large language models and other AI applications.    

"Nvidia’s impact goes far beyond the dollar swing," Chris Murphy, co-head of derivatives strategy at Susquehanna, said.

"As the anchor of the AI capex trade, its results will help define whether we’re in the next leg of expansion or entering digestion mode," Murphy said.

Nvidia's approximately 8% weighting in the S&P 500 Index and its market leadership in AI give the results added significance.

"The signal it sends — on demand, margins, supply chain, and investment posture — could shape sentiment across semis, hyperscalers, and AI infrastructure at large," Murphy said. "So while the stock may move plus or minus 7%, the narrative impact could extend across $10 trillion worth of correlated trades."

The technology sector pulled back in recent sessions on investor concerns about the sustainability of a rally in artificial-intelligence shares and inflated valuations of the stocks that drove much of this year's market gains. 

INVESTOR EXITS PRESSURE STOCK PRICE

Nvidia shares, up about 38% for the year, have retreated about 10% since hitting a record high in late October.

Investors will be parsing Nvidia's results for signs of waning demand in a sector that has driven much of the stock market's rally over recent months.

Nvidia shares have come under pressure in recent days on news of some high-profile investors, including billionaire Peter Thiel's hedge fund as well as SoftBank exiting the stock.

"As a major S&P 500 constituent, its results will likely carry broader implications for business investment and AI-related spending trends," Jason Pride, chief of investment strategy & research at Glenmede, said in a note.

(Reporting by Saqib Iqbal Ahmed and Laura Matthews; Editing by Alden Bentley and Bill Berkrot)