Market Eyes $305B Shift In Nvidia's Market Cap As Options Pricing Forecasts 9.8% Post-Earnings Move: 'A Lot Of That Insurance Is FOMO'

Market analysis predicts a record-breaking $300 billion swing in shares of Nvidia Corp. NVDA following its forthcoming earnings report, making it the most significant anticipated earnings move in history.

What Happened: Options pricing suggests traders are expecting a 9.8% move in Nvidia’s shares on Thursday, the day after the earnings report. This prediction, derived from ORATS data, exceeds any anticipated move before any Nvidia report over the past three years and surpasses the stock’s average post-earnings move of 8.1% during the same period, Reuters reported on Wednesday.

Considering Nvidia’s market capitalization of roughly $3.11 trillion, a 9.8% swing would amount to nearly $305 billion. This move would outshine the market capitalization of 95% of S&P 500 companies, including Netflix and Merck, according to LSEG data.

Options pricing indicates that traders are more concerned about missing a significant upside move from Nvidia than experiencing a substantial drop. Traders assign a 7% chance the stock will rise more than 20% by Friday, while only a 4% probability to a more than 20% sell-off, according to a Susquehanna Financial analysis of options data.

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Steve Sosnick, chief strategist at Interactive Brokers, stated, “Ahead of earnings, people typically want to buy hedges, they want to buy insurance, but in Nvidia’s case, a lot of that insurance is FOMO insurance. They don’t want to miss a rally.”

Why It Matters: Nvidia, one of the world’s most valuable companies, could serve as a leading market indicator for the technology and semiconductor sectors when it reports its second-quarter financial results. Analysts expect Nvidia to report second-quarter revenue of $28.68 billion, a significant increase from last year’s second-quarter revenue of $13.5 billion.

Furthermore, a Goldman Sachs note suggested that Nvidia’s stock might experience a $298 billion market value fluctuation following its second-quarter earnings report. This potential swing is based on the company's $3.17 trillion market capitalization.

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Photo via Wikimedia Commons

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari