The options market is bracing for a big move in Nvidia (NVDA) stock after the chipmaker’s earnings on May 20.
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High conviction NVDA bears now have this Tradr ETFTraders across Wall Street are positioning for a $355 billion swing in Nvidia’s market value, either higher or lower, after the company delivers its first-quarter financial results. That might seem like a very large swing in NVDA stock, but keep in mind that the company’s market capitalization is $5.40 trillion, making it the biggest publicly traded concern in the world.
Options markets expect Nvidia’s stock to move roughly 6.5% up or down the day after its financial results are released. The projected swing in NVDA shares would exceed the individual market value of approximately 90% of companies listed in the benchmark S&P 500 index.
Nvidia’s Market Dominance
Given its outsized market value, Nvidia holds significant sway over the entire stock market and it earnings are seen by many analysts as a test for the artificial intelligence (AI) trade that has been reignited since the end of March as investors’ risk appetite has grown.
Nvidia’s stock has moved an average of 7.6% after past earnings reports, according to analytics firm Option Research & Technology Services. The latest options activity on Wall Street suggests that traders remain bullish on the AI chipmaker’s stock.
Is NVDA Stock a Buy?
Nvidia’s stock has a consensus Strong Buy rating among 42 Wall Street analysts. That rating is based on 40 Buy, one Hold, and one Sell recommendations issued in the past three months. The average NVDA price target of $281.97 implies 26% upside from current levels.
