Markets Brace for Nvidia's Earnings Report Amid Global Anticipation

Nvidia’s earnings report is expected to shake global markets, with a potential 10% swing in shares. European markets remain flat as they await the results.

Bollywood Fever: As the global investment community holds its breath, all eyes are on Nvidia ahead of its much-anticipated earnings report, set to be released later today.

The chipmaker, whose market value skyrocketed from around $390 billion on the eve of the AI chatbot ChatGPT’s launch to nearly $3.2 trillion today, has become a key player in the AI computing boom.

This rapid rise even saw Nvidia briefly become the most valuable company in the world this June.

Given Nvidia’s sheer market size and its role as a bellwether in the semiconductor industry, its earnings report—due after the U.S. market close on Wednesday—has the potential to move global markets significantly.

Even if Nvidia delivers the expected doubling of its second-quarter revenue, investors accustomed to the company’s market-moving outperformance may still be hard to satisfy.

Nvidia was fined $5.5 million over its alleged failure to provide the actual GPU sales to cryptocurrency miners

Trade in Asia was relatively light, with modest movements ahead of the release, while European equity futures remained flat.

Europe’s data and reporting calendar for the day is sparse, with Eurozone broad money growth expected to rise to 2.7%.

Market participants, however, are primarily focused on Nvidia’s results, with upcoming European and U.S. inflation measures also on the radar for later in the week.

Options pricing suggests that traders are preparing for a nearly 10% swing in Nvidia’s shares once trading begins on Thursday.

In dollar terms, this could translate to more than $300 billion in market value, potentially marking the largest ever market move based on an earnings report.

Such a move would dwarf the market capitalization of 95% of the S&P 500 constituents, according to LSEG data, and could send ripples through the global semiconductor sector.

Meanwhile, sterling hovered near a 2-1/2 year high, benefiting from the dollar’s recent slide. Traders are currently pricing in about 100 basis points of U.S. interest rate cuts this year, compared to only 40 basis points in Britain.

As the markets gear up for Nvidia’s earnings release, fans of the iconic band Oasis, which signed its first record deal in 1993 just weeks after Nvidia was founded, have something to look forward to as well. Planned Oasis reunion shows next year are set to ignite a scramble for Mancunian hotel rooms.

Key developments that could influence markets on Wednesday: