Traders are pricing in a $355 billion swing in Nvidia's market value after the company reports first-quarter earnings, according to options positions that indicate the market remains 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 higher than the 5.6% move implied ahead of February earnings, it is still below Nvidia's historical average swing of 7.6%, suggesting the market is becoming more sanguine despite fears that AI capital expenditure may be unsustainable.
Some individual trades underscore a strong conviction that Nvidia could deliver an upside surprise. One notable trade was the purchase of a 25,000 call spread expiring June 1, betting on a 16% rise to $260 per share.
AI sector hedging and profit-taking are increasing as investors look to protect gains after the sharp run-up.
Nvidia shares have gained 19% this year, while the S&P 500 is up 8%.
