What AI is Seeing in This Earnings Season
NVIDIA Corporation (NVDA) is set to release its fourth-quarter fiscal year 2025 earnings today, February 26, 2025, after market close. Analysts anticipate record-breaking figures, with projected revenue of $38.1 billion, reflecting a 73% year-over-year increase. This surge is primarily attributed to the escalating demand for AI infrastructure, as major tech companies ramp up their investments in data centers.
The Stocks AI is Flagging for Big Moves
NVIDIA's stock has experienced notable activity leading up to the earnings announcement. Currently trading at $132.16, the stock has seen an intraday high of $133.71 and a low of $129.04. The heightened volatility suggests that traders are positioning themselves ahead of the earnings release, anticipating significant movement based on the results.
How Traders Can Position for Earnings Moves
Given the anticipated volatility, traders might consider strategies that capitalize on potential price swings. One approach is implementing a straddle options strategy, which involves purchasing both a call and a put option at the same strike price, allowing traders to profit from significant moves in either direction. Alternatively, for those with a bullish outlook, a call spread could be employed to benefit from upward movement while managing risk.
Post-Earnings AI Strategy: What’s Next?
Post-earnings, the focus will shift to NVIDIA's guidance for the upcoming quarters, especially concerning the rollout of their new Blackwell chip and competition from emerging players like China's DeepSeek AI model. Traders should monitor how these factors influence NVIDIA's market position and adjust their strategies accordingly. Additionally, observing institutional investment trends can provide insights into broader market sentiment toward NVIDIA's future performance.
The Trader’s Take
As an earnings-focused trader, I recognize the potential opportunities presented by NVIDIA's upcoming report. The substantial projected growth, driven by AI demand, positions NVIDIA favorably. However, it's crucial to remain cognizant of competitive pressures and supply chain considerations. Implementing strategies that allow flexibility and risk management, such as options plays, can be advantageous in navigating the post-earnings landscape.
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