Nvidia's Next Earnings Report Could Swing Its Market Cap By $300 Billion And Increase The S&P 500 Gains

Author: Zaheer Anwari | August 28, 2024 11:04am

• Nvidia is poised for a dramatic shift in market value, with a potential swing of $300 billion in its market cap.
• Nvidia's current valuation is approximately $3.14 trillion.
• Bullish signs in Nvidia's stock suggest a possible move towards $150.

As NVIDIA Corp (NASDAQ:NVDA) prepares for its upcoming earnings report, the tech giant stands on the brink of a potentially historic change in its market value. Industry analysts, using options pricing data, predict a possible swing of up to $300 billion in Nvidia's market capitalization.

This figure not only reflects the company's large valuation, around $3.14 trillion but also highlights the significant impact such a change could have, overshadowing the market caps of most S&P 500 companies.

The stakes are especially high now. Market sensitivities are elevated, with options traders anticipating a 9.8% stock price fluctuation after the earnings announcement. This is significantly higher than what's been typical over the past three years.

The increased volatility expectation highlights investors' strong focus on Nvidia. The company has driven about 25% of the S&P 500's gains this year, underscoring its impact on the broader market.

The anticipated earnings per share of $0.57 will be announced after market close this Wednesday, potentially driving expected fluctuations.

Nvidia’s recent market performance adds complexity to the story. The stock has jumped 40% from this month’s lows, boosting investor confidence. This rebound is part of a larger upward trend, with a 157% gain year-to-date, including a 9% increase in August.

Historically, Nvidia has shown strong recovery ability, bouncing back from sharp declines, as seen in the recent rally. This resilience is fueling the current bullish momentum, putting the stock close to previous record highs if it gains 10%.

However, navigating the stock market, especially with high-stakes earnings reports, requires nuance. A positive earnings surprise doesn't automatically lead to a stock price increase, as broader market dynamics and investor sentiment can separate financial results from stock performance.

This unpredictability makes the upcoming earnings report crucial. Adding complexity is Nvidia's stock movement within a significant range of $90 to $140.

Signs of bullish momentum in this zone suggest the possibility of a breakout. If the stock surpasses the $140 mark, it could quickly target the next resistance level at $150, paving the way for further gains.

After the closing bell on Wednesday, August 27, the stock closed at $128.30, trading down by 1.52%.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.

Posted In: NVDA