Nvidia's Earnings Report Sends Shockwaves Through Tech Market

Nvidia shares could see $300B swing following Q2 earnings report: UBS

Shares of Nvidia (NASDAQ:NVDA) could swing around 10% after the AI chipmaker releases its Q2 results, UBS said Wednesday, as investors prepared to see if the company can exceed expectations for a surge in Q2 earnings and revenue. Current options pricing showed traders are expecting a post-report move of around 10%, or a $300B swing with Nvidia's (NVDA) market capitalization of ~$3.1T, Solita Marcelli, UBS's Americas chief investment officer, said in a note. The Q2 report is due after Wednesday's closing bell. Seen as a bellwether for AI investment and the broader market (SP500)(COMP:IND), Nvidia (NVDA) is also expected to offer better-than-anticipated guidance for further financial results, she said. Goldman Sachs separately flagged that Nvidia (NVDA) options were implying a +/- 10% move after the Q2 report, higher than a four-quarter average of 7%. Analysts are looking for Nvidia (NVDA) to say its Q2 adjusted EPS and revenue each more than doubled over the past year, to $0.64 on $28.67B. Nvidia's (NVDA) report arrives after the stock has jumped ~28% following an August selloff that swept through the broader market. "We have said that future gains in global tech stocks should be more gradual after the quick rebound over the past three weeks, with potential headwinds from U.S. macroeconomic data and further news on semiconductor export controls likely contributing to rising volatility," Marcelli said. "However, we continue to hold a positive structural view on the broader AI theme," she said. UBS said investment in AI is set to continue growing, with Big Tech companies on course to increase their capital spending this year by 43% Y/Y. "However, the capex intensity -- capex divided by sales -- for big tech remains below their historical peaks," Marcelli said. UBS' analysis shows Big Tech's capex could grow by as much as 25% in 2025, "boding well for AI enablers in the semiconductors space," she said.

Nvidia's impact on the S&P 500 after earnings reports 'towers' over other stocks: Bespoke

In one of many ways to illustrate Nvidia's (NASDAQ:NVDA) market influence, Bespoke Investment Group shared a chart showing the tech behemoth's impact on the S&P 500 (SP500) after its earnings reports "towers" over all other stocks delivering financial results. The "average" reaction to Nvidia (NVDA) earnings coupled with its market cap translates into a one-day impact of 54 basis points, or 0.5%, on the S&P 500 (SP500), the firm said Wednesday before the AI chipmaker released its Q2 report. Heading into the report, Nvidia (NVDA) had a $3.2T market cap and 6.7% weight in the S&P 500 (SP500). Apple (AAPL), the world's most-valuable company, has a 33bp one-day impact on the benchmark (SP500) after its quarterly figures, and Amazon (AMZN) is the only other stock with an impact of more than 25 bps, Bespoke said on its blog: Bespoke said Nvidia stock (NVDA) itself averages a one-day move of +/- 8.1% when investors react to its earnings reports, tying Meta (META) for second in a ranking of the 15 most heavily weighted S&P 500 (SP500) stocks. Amazon (AMZN) is first, with an 8.3% average move in the online retailer's stock following quarterly updates. Nvidia's (NVDA) impact on the benchmark doesn't mean the S&P 500 (SP500) is locked-in for a 0.54% move on Thursday, Bespoke said. "There have been plenty of quarters where NVDA's one-day reaction to earnings has been well less than 8%, including four of the last eight quarters where the one-day reaction to earnings was less than half of the average," it said. But history also shows there have been three quarters during that same span where NVDA's (NVDA) one-day move tied to earnings was more than 10%, including a 24% jump in May 2023 in the session following its blowout Q1 report. "Based on its current market cap, a 24% move in NVDA would equate to a 1.6% move in the S&P 500 - for just one stock," Bespoke said Wednesday. More on Nvidia and the markets Has Nvidia Indeed Become The World's 'Most Important Stock'? Nvidia shares could see $300B swing tied to Q2 earnings: UBS Nvidia earnings will affect ETFs, see 20 funds that traditionally observe the largest moves