Trading Nvidia Post-Earnings
Trading Nvidia Post-Earnings
By:Mike Butler
So what lies ahead? The bullish and bearish cases for Nvidia in 2023.
- Nvidia rallied 10% at its peak after its earnings call yesterday.
- The stock beat quarterly earnings-per-share expectations by 26%.
- The company beat quarterly revenue expectations by 20%.
- Competitors like Advanced Micro Devices are down big after NVDA earnings.
Nvidia Earnings Results
Nvidia (NVDA) held its quarterly earnings call yesterday, and the stock rallied after an extremely strong report—the company beat quarterly earnings-per-share (EPS) and revenue expectations by 26% and 20% respectively.
Nvidia reported an EPS of $2.70 on an expectation around $2.14 and posted a revenue of $13.51 billion on an expected $11.22 billion.
The sky appears to be the limit for this company, blowing both EPS and revenue out of the water in a big way. What's interesting though is that the expected stock price move for earnings was just under $50, as discussed in the earnings preview article, and the stock hit that mark in after-hours trading, just after 4 p.m. Central Time on Wednesday.
The stock opened 2023 at $148.41 and breached $500 per share for the first time after the earnings call. What a massive move we've witnessed this year in this tech giant's stock price!
Nvidia after hours stock price
It's always fun to check out the earnings move by the minute with high-flier stocks like Nvidia.
The first yellow arrow points to the stock price move right after the earnings were released—a big gap to the upside is not surprising given the massive outperformance relative to expectations for this earnings call. The stock price faltered a bit after the initial jump, but it gapped up again when the pre-market session started at 3 a.m. today, as signified by the blue arrow.
When the market opened today, there were some other factors that caused the general market to take a nosedive, and NVDA shares fell along with it right after the open shown by the red arrow in the image above, erasing about half of the gain the stock saw from the previous close at $471.16.
What is next for Nvidia?
The relative strength in Nvidia can't be understated, as we see competitors like Advanced Micro Devices (AMD) selling off big after the big earnings report from NVDA stock. It's quite surprising to see such a selloff in AMD, given the fact that the company rallied after the close on Wednesday alongside Nvidia, indicating that the move was good for all AI companies.
The options market is pricing in an expected move of about +-$100.00 from the current stock price in NVDA through the December 2023 cycle, which almost covers the rest of the year's expected movement. Based on current implied volatility, this is about 20% of the current stock price. Not too shabby for bulls or bears, depending on your sentiment.
The big takeaway for me from this earnings call was the revenue figure from the datacenter unit, which encompasses the demand from the AI sector. The revenue figures were massive and resulted in a year-over-year (YoY) increase of over 170% and they did not back down from forecasts for the next quarter and the rest of the year.
We'll see where NVDA ends up at the end of 2023, but it's full steam ahead so far for the popular tech giant.
Mike Butler, tastylive director of market intelligence, has been in the markets and trading for a decade. He appears on Options Trading Concepts Live, airing Monday-Friday. @tradermikeyb
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.