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Investors are bracing for NVIDIA’s quarterly results this week. Options prices suggest the company’s shares could move about seven percent once the numbers are released. With a market value near $4.6 trillion, that percentage translates to a possible $320 billion swing in value.
NVIDIA’s earnings report could trigger the largest post-earnings market move in the company’s history. The previous record was a $276 billion jump following quarterly results in February 2024.
On average, NVIDIA’s stock has moved by 7.3% the day after reporting results over the last 12 quarters. The company has become a focal point for investors seeking exposure to the artificial intelligence (AI) boom. Its graphics processing units dominate the market for training large language models and other AI applications.
Chris Murphy, Co-Head of Derivatives Strategy at Susquehanna, said that NVIDIA’s impact goes beyond the dollar swing. “As the anchor of the AI capex trade, its results will help define whether we’re in the next leg of expansion or entering digestion mode,” Murphy said. NVIDIA’s approximately 8% weighting in the S&P 500 Index and its market leadership in AI give the results added significance.
The signal NVIDIA sends regarding demand, margins, supply chain, and investment posture could shape sentiment across the broader technology sector. This could extend to semiconductors, hyperscalers, and AI infrastructure, which together comprise a $10 trillion ecosystem. Even as NVIDIA’s stock may move plus or minus 7%, the narrative impact could ripple through a range of correlated trades.
Despite a recent pullback in tech stocks, the results of NVIDIA have the potential to impact business investment and AI-related spending trends. This is particularly true considering the company's market leadership and role as a driver of much of the current AI hype. With high-profile investors like Peter Thiel's hedge fund and SoftBank recently exiting NVIDIA, the investor sentiment is on edge.
Additionally, NVIDIA and Microsoft announced plans to invest in Anthropic, committing up to $10 billion and $5 billion, respectively. In return, Anthropic pledged to spend $30 billion on Microsoft’s cloud services.
The arrangement reflects an industry-wide scramble for computing power as companies race to develop models that can rival human intelligence. Anthropic’s chief executive, Dario Amodei, said the additional capacity will help train models for Microsoft’s products and support joint sales.
This tie-up follows OpenAI’s recent $38 billion cloud agreement with Amazon and signals intensifying competition among AI developers.
OpenAI’s CEO, Sam Altman, has indicated that the startup plans to spend $1.4 trillion on 30 gigawatts of computing infrastructure to power its models. Such enormous commitments underscore how costly the race for dominance has become. However, some investors worry that these circular arrangements - where one partner’s spending props up another’s revenue - may inflate valuations and contribute to bubble risk.
