Nvidia Earnings Take Center Stage: Market Braces for AI Giant's Financial Report

Nvidia earnings are more important to the market than the Fed and jobs data, according to options market

Nvidia earnings results this week are more important to the stock market than the Federal Reserve or even jobs data, according to the options market. The AI chipmaker is set to release results Wednesday after the stock market closes, moving back into the spotlight on Wall Street following a lengthy focus on the U.S. presidential election and the Federal Reserve's interest rate outlook. But Jense Huang's company remains crucially important to the market, according to Wall Street firms tracking the options market. "While election implications, rates volatility and the Fed dominate conversations, options tell us NVDA earnings are still a very big deal for the market," Gonzalo Asis, equity-linked analyst at Bank of America Securities, wrote on Sunday. Asis says future implied moves for the S & P 500 have been tracking implied moves in Nvidia, suggesting there's more risk attached to the AI chipmaker than there is from nonfarm payrolls or consumer price index repoerts or even Federal Reserve policy meetings. "Options show that [Nvidia results] will be the most important catalyst left for the remainder of the year, notably, more so than NFP, CPI and FOMC," Barclays' equity derivatives strategist Stefano Pascale wrote on Tuesday. NVDA 1D mountain Nvidia The options market shows an implied move of 8% for Nvidia, according to Barclays. That's lower than the two-year average of 9.3%, but greater than the 6.4% realized move following last quarter's financial results. For investors, how Nvidia moves could determine what's next for a market that's been flagging lately following the postelection rally, according to Bank of America Securities' Asis. The three major averages are more than 2% off their recent highs they reached immediately after the election. Asis recommends hedging against the earnings results in case Nvidia disappoints. Nvidia's driven roughly one-fifth of the S & P 500's return over the last 12 months, and is expected to spur nearly 25% of the index's third-quarter earnings growth, according to Bank of America. The semiconductor company has a market value of nearly $3.5 trillion, on a par with Apple but ahead of Microsoft , after soaring 196% so far in 2024.

Nvidia earnings more important than CPI, Fed: Barclays By Investing.com

Investing.com -- Barclays analysts suggest that Nvidia (NASDAQ:NVDA)'s upcoming earnings report on November 20 is poised to be the defining market catalyst of the year, eclipsing traditional macroeconomic events like CPI data and Federal Reserve decisions. In a note Tuesday, the bank describes the heightened anticipation surrounding Nvidia's results as a reflection of the "outsized impact of AI" and renewed enthusiasm among retail investors for upside opportunities. "Options show that NVDA results... will be the most important catalyst left for the remainder of the year," Barclays (LON:BARC) writes. The analysts highlight the unprecedented focus on single-stock dynamics, with Nvidia's performance serving as a barometer for broader market sentiment. They add that retail investors' increased activity in call options on high-profile stocks like Tesla (NASDAQ:TSLA), Coinbase (NASDAQ:COIN), and Palantir (NYSE:PLTR) further underscores this trend. Market expectations for Nvidia are sky-high, with options implying an 8% move following the earnings release, slightly below the two-year average realized volatility. Barclays warns of "asymmetric risk," particularly given the influence of levered exchange-traded products (ETPs) centered on Nvidia, which could amplify volatility. According to the bank, the impact of Nvidia's earnings isn't confined to U.S. markets. They explain that in Europe, semiconductor giant ASML (AS:ASML) is also seeing heightened activity tied to Nvidia's results. Barclays says options on ASML are pricing in a larger-than-normal implied move of 3.3% despite its historically low correlation to Nvidia's earnings. They conclude by cautioning against strategies like selling gamma ahead of Nvidia's results. The analysts note that high expectations combined with speculative activity in Nvidia-related financial products could lead to heightened market swings, making this earnings report a focal point for investors worldwide.