BY MARK SEBASTIAN
August 26, 2024
REPLAY
Nvidia Corp (Ticker: NVDA)
he last time I wrote this up NVDA had a trailing PE of 62…it now has one of 75.
NVDA reports on August 28th after market close….There is a lot of hope in this one…if the earnings, as we have been saying this season…are not PERFECT…the stock is going to tank.
Rather than dig back into the fundamentals ahead of earnings….lets look at what they are expecting…
The normal expected move is 6.88%…its pricing in 9.2%…and that is going to go up…
Here is what the moves have looked like:
VDA has moved less than the implied move more often than not since 2021…but when it does move more…those moves have been FAR bigger…the move 2 quarters ago was 2x and the one in May of 2024 of was 4X….
Heading into the next report the high estimate for NVDA is .73 a share…the low is .61 with the average .64…the number you need to pay attention to is .73…if its below that…the stock is going to go down.
Revenues are expected to be 28.24 billion…the top end is over 30 billion…if it isnt over that number…again..the stock is going to have problems.
Long term…I still think all the AI chips coming online is a problem for NVDIA but near term lets see what Licia sees.
Giant Earnings Premiums for NVDA
Handing out superlatives for NVDA stock over the last 3 years on its 10x run to the current price is easy. Even I was shocked that the earnings straddle was $15. That is the market expecting over a 10% move on earnings.
Volume at crazy high volatility is robust with size buyers.
NVDA had 3 banger moves in the last 8 cycles. Paper is paying double the average expected move. In reality traders just think NVDA can retake the highs of the year. It will be interesting to see if NVDA get back on the banger earnings train but twice the average feels rich to me and the surprise should be up if history is the guide.
Out on Assignment
Out on Assignment
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Mark Sebastian
Founder & CEO, Option Pit
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