Nvidia shares set for $350 billion price swing after earnings, options show

NEW YORK (Reuters) - Traders are pricing in a $355 billion swing in Nvidia's market value after the company reports first-quarter earnings on Wednesday, according to options positions that indicate the market is still bullish on the AI giant while keen to protect gains.

The chipmaker's options imply a move of about 6.5% in either direction on Thursday, a day after the company reports results.

That would translate into a swing of roughly $350 billion in market capitalization - more than the individual market value of about 90% of S&P 500 constituents.

While that is higher than the 5.6% move implied ahead of the company's February earnings, it is still well below Nvidia's historical average price swing of ⁠7.6%, according to analytics firm Option Research & Technology Services (ORATS).

That suggests the market is becoming more sanguine about the company's earnings, despite long-simmering fears that massive AI capital expenditure more broadly may prove unsustainable.

"I think investors have become complacent about AI/capex," said Matt Amberson, founder of ORATS.

Some individual trades underscore a strong conviction that Nvidia could once again deliver an upside surprise. One notable Monday trade was the purchase of a 25,000 call spread expiring June 1 for $1.78, betting that Nvidia could rise roughly 16% to $260 per share in the next two weeks, with a potential payoff more than seven times the initial cost, according to Chris Murphy, co-head of derivatives strategy at Susquehanna, a market maker.