NVIDIA's stock price is expected to fluctuate significantly after the financial results are announced. In particular, the expected volatility this time is greater than at any point in the past three years, and the impact of NVIDIA's stock price fluctuations on the entire U.S. stock market cannot be ignored.
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Expected volatility
NVIDIA's stock price is expected to fluctuate by about 9.8% the day after the financial results are announced. This is greater than at any point before the financial results are announced in the past three years, and exceeds the average historical volatility of 8.1%.
NVIDIA's market capitalization is about $3.11 trillion, so a 9.8% fluctuation is equivalent to about $305 billion. There is no other stock that moves such a large amount of money.
NVIDIA's influence
NVIDIA's semiconductors are essential for AI, and its stock price fluctuations have a large impact on U.S. stocks as a whole. In fact, about a quarter of the S&P 500's 18% increase since the beginning of the year is due to NVIDIA's price increase.
Steve Sosnick, chief strategist at Interactive Brokers, said NVIDIA is a big contributor to the overall profitability of the S&P 500.
Options Market Attitude
Options markets are more wary of the risk of missing out on a sharp rise in NVIDIA's stock price than the risk of a sharp fall.
A Susquehanna Financial analysis puts the probability of the stock price rising by 20% or more at 7% and the probability of it falling by 20% or more at 4%.
Sosnick noted that market participants are placing emphasis on insurance against FOMO (fear of missing out).
Historical Volatility
NVIDIA's 30-day historical volatility is roughly twice the average of all other stocks with market capitalizations over $1 trillion.
NVIDIA's stock price is expected to fluctuate significantly after the earnings announcement, with the impact on U.S. stocks as a whole. Options markets are wary of missing out on any big gains, and Nvidia's history of volatility supports that sentiment. Nvidia is a market-holding giant, so its moves are worth watching.
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