Anticipation mounts as Nvidia’s earnings announcement draws near, with options traders in the U.S. equity market bracing for what could be a seismic shift in the shares of the leading artificial intelligence chipmaker.
With Nvidia’s stock surging approximately 50% since the beginning of the year, options analytics from ORATS suggest that its upcoming quarterly results, scheduled for Feb. 21, could trigger a substantial move of around 11% in either direction. This projection surpasses the average earnings movement of 6.7% seen over the past three years, marking the most significant expected swing in recent memory. ORATS founder Matt Amberson highlights that such a move, given Nvidia’s hefty market capitalization of $1.8 trillion, could potentially translate into a market value fluctuation of approximately $200 billion—a figure surpassing the market cap of rival Intel Corp and eclipsing that of the majority of S&P 500 constituents.
Trading activity underscores the heightened anticipation, with over 750,000 Nvidia options changing hands by 1 p.m. (1800 GMT) on Thursday, making it one of the most actively traded single stock names in the options market.
Despite the stock’s remarkable ascent, the demand for bullish options remains robust, as evidenced by the 90-day 25 delta call skew reaching near five-year highs, according to analysis from Susquehanna. Christopher Jacobson, a strategist at Susquehanna Financial Group, interprets this elevated call skew as indicative of investors’ continued belief in the potential for further upside, even amidst elevated volatility. Many are turning to upside calls for exposure to potential gains while mitigating risk.
In a significant milestone, Nvidia surpassed Google-parent Alphabet to become the third most valuable U.S. company on Wednesday.
Analysts’ expectations for Nvidia’s upcoming earnings report are optimistic, with a consensus estimate of $4.56 earnings per share and an anticipated quarterly revenue surge to $20.378 billion from $6.05 billion a year ago, based on data from 33 analysts compiled by LSEG.
