Traders brace for Nvidia $355b value swing

Traders are pricing in a roughly US$355 billion swing in Nvidia’s market value following its first-quarter earnings report due on May 20.

Options data implied the stock could move about 6.5% in either direction after the results.

That is higher than the 5.6% move implied before Nvidia’s February results but below its 7.6% historical average, pointing to lower anxiety around the report, said ORATS founder Matt Amberson.

Demand for call options has risen, including a June 1 call spread bought on May 19 that bets Nvidia shares could climb about 16% to US$260 within two weeks, said Susquehanna‘s Chris Murphy.

At the same time, hedging and profit-taking in semiconductor stocks and related ETFs show investors are protecting gains.

Nvidia’s shares have risen 19% this year, compared with an 8% gain for the S&P 500 and Philadelphia Semiconductor Index‘s 57% gain.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

What the options market’s expected Nvidia stock move often misses

The 6.5% implied move usually comes from the price of an at-the-money straddle, a paired at-the-money call and put that traders use to price expected swings after earnings 1.
That sits near Nvidia’s 6.32% average one-day post-earnings move across the prior 20 reports, yet that figure blurs how wide the outcomes can be 2.
The stock jumped 24.36% after the May 2023 report, then moved only 0.08% after August 2023 results, so the average says little about a single quarter 2.
This gap matters because options can drop fast after implied volatility collapses in an “IV crush,” leaving traders with losses when the share move trails the implied move even if they called the direction right 1.

Beyond the stock price, Nvidia’s earnings are also a test of AI infrastructure build-out

Nvidia’s earnings also act as a read on the build-out of AI infrastructure. Goldman Sachs Global Institute pegs that spending at about US$7.6 trillion from 2026 through 2031 across computing equipment, data centers, and power systems 3.
Construction is already moving. BloombergNEF, a research firm focused on energy and commodity markets, put data center capacity under construction worldwide at 23.1 gigawatts at the end of September 2025 4.
The expansion still runs into bottlenecks. Lead times run 100 to 150 weeks for generators, turbines plus switchgear, the equipment that controls and protects power systems 5.
Nvidia’s outlook will help shape views on whether this build-out can get past power constraints, as data centers are projected to use more than 10% of global electricity by 2035 5.