Nvidia shares fall 10% from the highs ahead of earnings

GPU-maker and generative artificial intelligence superstar Nvidia reports earnings after the close and — needless to say — there is plenty of speculation about what will happen to the stock.

Through last week, shares of NVDA represented 30% of the total gain of the S&P 500 year-to-date. Shares have gone supernova in the past year and last week passed Amazon in market cap to rank 3rd in the world.

Here is what’s expected:

  • Revenue of $20.6 billion
  • EPS of $4.63/share
  • Net income $10.4 billion

What’s more important is guidance as major growth is priced into this stock.

Options imply a 10.2% move on earnings, which is around $170 billion in either direction. That’s large than entire market cap of 452 companies in the S&P 500.

Nvidia is undoubtedly the flag-bearer of the AI-driven rally in equities over the past year so any kind of miss could potentially undercut many stocks.There is some apprehension building ahead of the results as shares fell sharply yesterday and are down another 4% today, bringing the total decline from the all-time high in early February to 10.6%.

NVDA daily

What has some traders worried is the past two earnings reports. NVDA crushed the consensus on both, yet the stock barely moved higher on either day. You have to go back to last May for a sustained post-earnings gap higher.


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