Nvidia Earnings Unwind
Hey everybody, Phoenix here, many of you probably know me as Nate’s right-hand man! He’s teaching classes most of today, so I just wanted to take a couple of minutes to discuss Nvidia’s earnings from yesterday.
Many of us likely know from Nate writing about it yesterday that Nvidia reported its earnings last night after the market closed… If you didn’t know, now you do!
Hopefully, many of you joined Nate, Graham, and Lance for their FREE live trading session prior to NVDA’s earnings. (you can catch the recording here) Over 1,250 people joined in yesterday, which is absolutely awesome and the fellas love to see that kind of activity, especially when they are giving away free trades!
Overall, I think they did about 4 different live trades together and the feedback was awesome, so thanks to all of you for making that so fun.
Nvidia’s earnings yesterday were quite interesting to say the least…
Prior to yesterday’s earnings release, Nvidia beat 6 out of its last 6 earnings… Yesterday made it 7 for 7.
But if you’ve been watching the market today, then you’ll see that shares of NVDA are down about 4% today alone. With shares initially beginning to plummet in after-hours trading yesterday.
This quarter’s earnings were fantastic. NVDA reported over $30 billion in sales in its fiscal second quarter, up 122% from the same quarter last year.
Which even beat out Wall Street analyst’s lofty predictions of $28.7 billion.
Then to top it off, profits from the quarter more than doubled to $16.6 billion, up from the $15 billion analysts expected.
Total blockbuster earnings…
Yet shares are plummeting today.
Keep in mind that Nvidia’s stock has helped to power the market’s feverish rally for much of this year. So, when NVDA dips, we need to take notice.
But even more so, we need to notice the inconsistency and clear level of confusion present in the markets right now.
When companies report fantastic earnings and their share prices plummet, I take notice. I like to think of this exact circumstance as a snapshot into investor sentiment and how investor’s attitudes are affecting the market.
We’ve seen a weird period like this happen already once this year — back in the first 3 weeks of July. Where we saw companies (like Netflix) report fantastic earnings, beat expectations, and outperform Wall Street by leaps and bounds and yet still get absolutely punished.
So, what should we expect because of this kind of market action?
Don’t be surprised if we witness a large swath of volatility as we edge closer towards the Fed’s interest rate cut in September.
But the good news is, with volatility comes a plethora of opportunities for us as options traders.
Especially with skilled and experienced options traders like Nate, Graham, Lance, and the other fellas.
In fact, Nate actually has a pretty neat strategy he calls Jump Trades meant to take advantage of these high volatility type periods in the market. And he’s been busy doing live educational classes and live trades with members much of this week.
So, if you’d like to check it out and learn more about Jump Trades, I’d highly encourage you to click right here.
— Phoenix van Zutphen
