TLDR
- Options traders purchased approximately 13,000 December $205/$235 call spreads ahead of Nvidia’s earnings report, indicating bullish but measured expectations
- Options markets are pricing in a potential 6.9% stock swing following the earnings announcement
- Wall Street analysts expect Nvidia’s Q3 revenue to exceed $50 billion for the first time, with adjusted EPS around $1.25
- The Data Center segment is projected to contribute nearly 90% of total revenue, driven by AI infrastructure spending from major tech companies
- Analysts maintain a Strong Buy rating with an average price target of $243.09, representing 32% upside potential
Nvidia reports fiscal third-quarter earnings after today’s market close. Traders have spent the day loading up on options contracts that point to expectations of upward movement.
According to Bloomberg data, roughly 13,000 December $205/$235 call spreads changed hands. This strategy profits when the stock rises but limits gains above $235.
The positioning suggests traders expect a move higher without needing a massive rally. It’s a more conservative bullish bet than straight call buying.
Implied volatility has eased slightly heading into the report. Options are pricing in roughly a 6.9% swing in either direction based on November 18 levels.
About half of all Nvidia option volume is concentrated in contracts expiring November 21. The $180 strike price shows the heaviest interest, with more than 226,000 calls and puts outstanding at that level.
The November 21 $200 call was the most active contract by midday. Around 88,000 of these traded, another signal that market participants are preparing for movement.
Revenue and Earnings Expectations
Wall Street analysts are projecting revenue above $50 billion for the first time in company history. The consensus estimate for adjusted earnings per share sits at approximately $1.25.
That would represent year-over-year growth of more than 50%. Nvidia’s market value recently crossed $5 trillion.
A beat on expectations could push the stock higher and lift other tech names. A miss might trigger selling pressure across the sector.
Data Center and Product Focus
The Data Center segment is expected to account for nearly 90% of quarterly revenue. Investors want to see whether Amazon, Microsoft, and Google are maintaining their AI infrastructure spending pace.
Sustained demand from these hyperscalers would support confidence in Nvidia’s growth trajectory. The new Blackwell chip series represents another area of focus.
Market participants are looking for updates on Blackwell adoption rates. The Rubin series also factors into the product roadmap discussion.
Forward guidance will carry weight in determining market reaction. Investors are watching for commentary on order books and long-term backlog.
Strong demand signals could ease concerns about sector valuations. Evidence of sustained AI infrastructure spending would support the current stock price levels.
Analysts maintain a Strong Buy consensus rating on the stock. The rating includes 37 Buy recommendations, one Hold, and one Sell based on recent analyst updates.
The average price target stands at $243.09. This implies potential upside of 32% from current trading levels.
Near-term contracts dominate today’s trading activity. The concentration in short-dated options reflects the focus on immediate post-earnings movement rather than longer-term positioning.
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