Market Insights

Nvidia reports earnings this afternoon, which could trigger countless trades across the options market.

The AI chip giant is the second-busiest options underlier, trailing only the SPDR S&P 500 ETF (SPY). That can help traders position for upside, downside or sideways moves. The event could also trigger a flurry of activity across the technology sector, which includes some of the most active stocks in the overall market. See below for a table of key names.

NVDA is arguably the most important company in the last two years. It launched the AI boom in March 2023 and proceeded to rise about 600 percent through early January. However, the stock has mostly drifted since last summer as investors assess the longer-term prospects of AI. It’s also absorbed negative events like the launch of China’s DeepSeek AI model and reports Microsoft (MSFT) is slowing capital investments. Both of those headlines raised questions about demand for NVDA’s advanced chips.

Some big research firms remained bullish going into the report today. Dan Ives of Wedbush Securities predicted a “clear beat and raise.” That means he sees earnings and revenue beating guidance, plus CEO Jensen Huang raising guidance. Piper Sandler said NVDA will “nicely beat” thanks to strong demand and increased supply of newly manufactured chips. Evercore doesn’t expect a “material beat/raise,” but was positive based on the company’s valuation.

Investors are likely to focus on news about the Blackwell chip, which is expected to gradually replace the Hopper architecture. Some analysts expect the newer product be highlighted at NVDA’s GTC AI conference March 17-21. They may also want updates on how trade restrictions against China are impacting business.

Nvidia Options

NVDA said it will announce the results on its investor relations page around 4:20 p.m. ET, followed by a conference call at 5 p.m. The news is likely to impact prices in normal trading on Thursday, February 27.

Traders can potentially buy and sell calls and puts during today’s session to position for movement. Volumes may be especially active in the weekly contracts expiring this Friday, February 28.

NVDA declined in the week after its last two earnings reports. The last time it rallied sharply was on May 23.

Nvidia (NVDA), daily chart, with select indicators and events.

Here are some ways traders may position for moves:

• Traders looking for the stock to rally on good news may consider bullish call spreads. That strategy entails buying one call near the money and selling another further from the money to reduce cost. The resulting lower cost potentially increases leverage.
• Traders looking for the stock to fall may consider bearish put spreads. That strategy entails buying one put near the money and selling another at a lower strike. It can also potentially leverage a move to a specific price.

Calls set the level where a security can be purchased. That can let them appreciate in value when stocks go up. Puts are just the opposite, fixing a selling price. They can appreciate when shares move to the downside. Both calls and puts can generate leverage because of their limited upfront cost. Both can expire worthless if prices don’t move enough in the intended direction.

Alternately customers may consider credit spreads if they don’t expect significant moves.

Options on AI Stocks

Given its importance to the technology industry, NVDA’s results may impact other companies involved in artificial intelligence. The table below lists some other actively traded underliers that may gain attention from the news:

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