Nvidia (NVDA) Earnings: Everything You Need to Know

We're expecting tomorrow’s Nvidia earnings report to document massive growth for all of Nvidia’s business sectorsNvidia will report 2023 fourth quarter earnings tomorrow after the market closes at 3:20 p.m. CDT.The market is expecting huge numbers with an earnings-per-share expectation of $4.64 on $20.55 billion in revenue.The chipmaker has beaten earnings expectations by double digit percentages three quarters in a row.Nvidia's stock price has a weekly expected move that exceeds 10% of the current price.Nvidia Earnings Preview for Q4 ’23

The stock market opened slightly down today after President's Day, but Nvidia (NVDA) is taking a 5% hit to the downside, down $35 in the first 30 minutes of trading. A year ago today, Nvidia was trading around $210 per share. Today, the stock sits just under $700 per share as a result of the technological transformation we've witnessed in Artificial Intelligence, with many AI developers adopting Nvidia products to bring their ideas into the AI landscape.

Nvidia has big expectations this week, as they report quarterly earnings tomorrow after the market closes at 3:20 p.m. CST. In the first earnings report after surpassing the market cap of household names like Amazon (AMZN) and Alphabet (GOOGL), Nvidia has a stock price expected move of +-$77.54 based on current implied volatility. This is well above 10% of the current stock price which is right around $700 per share, putting it near the top of expected moves relative to stock price for other popular tech stocks this earnings season.

Similar to the previous few quarters, we're expecting massive growth across all business sectors for Nvidia. We'll just have to see how the market digests the forecast for 2024 and whether or not Nvidia exceeds expectations in a big way, meets already heightened expectations or misses the mark this week. Is this explosive growth sustainable? And if not, how long will it last?

To put more context around this week's earnings report, we can look at the expected stock price move for later-dated options expiration cycles. The higher the expected move this week relative to options cycles farther out in time, the more weight the market is putting on this quarterly earnings announcement. This week, we're looking at a +-$77.54 expected stock price move for the next three days, compared to a +-$117.72 expected stock price move for the next 59 days. This goes to show just how much movement the market is expecting from Nvidia's earnings announcement this week.

Bullish on Nvidia for earnings this week

NVDA has had nothing short of an amazing year. It's hard to forget about the historic earnings rally from $300 to $400 less than a year ago, and the stock hasn't looked back since. The bullish case for Nvidia could be an explosive quarter exceeding expectations and positive sentiment for the rest of this year.

It's pretty staggering to see the revenue growth in Nvidia over a year's time. In Q3 ’23, revenue came in at $5.9 billion. A year later, Nvidia reported a quarterly revenue of $18.1 billion. We will see tomorrow whether Nvidia can post another huge number and if the market sees the earnings report in a positive way.

Bearish on Nvidia for earnings this week

It's hard to imagine AI going away, but a lot of Nvidia's recent success is directly tied to AI demand. If this changes, or if demand stalls, this could impact NVDA stock in a negative way. Most of the big companies buying into Nvidia products have stated they will continue to expand their AI efforts, which is good for NVDA's bottom line and 2024 guidance.

With that said, if Nvidia misses on any earnings expectations, or if the company's supply and demand structure shifts in a negative way, we could see a bearish move in the stock price. Is the today’s selloff a prequel to what's to come this week after earnings? We'll find out this week!

Tune in to Options Trading Concepts Live ahead of the Nvidia earnings report for some options trading strategy ideas!

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

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