Indices 20/5, page-8

This week is all about that graphics card manufacturers earnings out 22/5 US time. Broader Indices will move up and down based on their report.

NVIDIA options show expected $200bn share swing after results

NVIDIA Corp (NASDAQ:NVDA, ETR:NVD)’s first-quarter results are expected to spark a US$200 billion swing in the chipmaker’s market capitalisation.

Data from analytics firm Trade Alert indicates options traders are anticipating an 8.7% swing in NVIDIA’s share price following the results on Wednesday.

Given the artificial intelligence chipmaker’s US$2.3 trillion market cap, the move would see US$200 billion added to or slashed from NVIDIA’s valuation.

Such a swing would be less aggressive than the average 12% move priced in by markets in NVIDIA’s last eight quarters, but would still see the change in its market cap worth more than 90% of S&P 500 constituents.

NVIDIA’s results will come exactly one year after what Deutsche Bank analysts dubbed its “market-changing” report in May 2023.Ongoing healthy demand for AI products should continue fuelling expectation-beating figures, Deutsche said, including ahead of the release of NVIDIA’s latest Blackwell graphics processing unit this year.

Overall, analysts expect NVIDIA to post earnings of US$5.59 a share, alongside a three-fold increase in revenue to US$24.65 billion.

Expectations for volatility from options traders, who buy call or puts allowing a profit if the shares go up or down respectively, indicate many are expecting upside surprise in the earnings.

Highlighting sales growth in the likes of Asia-based sales, Barclays noted “all signs point to another revision higher” ahead of the results.