Chipmaker Nvidia (NVDA) has usually rewarded investors after earnings, but the holding period has mattered a lot. Since 2016, the stock’s post-earnings returns have been positive across every holding period studied, although the short-term edge has been fairly small. Indeed, according to Yahoo Finance, the median gain has been just 0.3% after one day, 3.3% after one week, and 0.4% after one month. However, the numbers improve sharply over longer periods of time by rising to 11.1% over one quarter and 87.6% over one year.
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Forget margin or options. Here's how the pros trade NVDAThis matters heading into the firm’s next earnings report because Nvidia stock options traders are pricing in an 8.3% post-earnings move. That is well above the stock’s normal daily range over the past quarter, but it is not unusual for Nvidia around earnings. The challenge for short-term traders is that even when the stock makes a big move, the first reaction can be difficult to predict. Historically, Nvidia has finished higher 55% of the time after one day, 60% after one week, and 53% after one month, but those win rates rise to 78% over one quarter and 84% over one year.
In other words, Nvidia’s earnings setup has often favored patience more than perfect timing. Nevertheless, the longer-term data, going back to the beginning of this century, adds some caution, as Nvidia’s one-year post-earnings returns have moved in cycles. In fact, the rolling 10-quarter average of its one-year return peaked above 150% during the height of the AI boom and has since cooled to about 70%.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Nvidia stock based on 40 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average Nvidia price target of $281.59 per share implies 26.6% upside potential.
