As NVIDIA (NVDA) prepares to release earnings, traders and investors are not just watching for headline EPS and revenue beats—those are largely expected. The key to Nvidia’s post-earnings stock reaction will likely be underlying business metrics and forward-looking growth signals across its AI, gaming, and data center segments.
? AI: The Core Growth Engine
Expected: Strong AI chip sales, driven by hyperscalers (Microsoft, Meta, Amazon, Google) and enterprise demand.What to Watch:Any signs of AI spending slowing down or, conversely, orders accelerating beyond expectations.Supply constraints—can Nvidia keep up with demand?Gross margins—are they maintaining or improving despite high costs?H100 and Blackwell GPU adoption—how much traction are the next-gen chips getting?Expected: Moderate year-over-year growth (~15%), but possible quarter-over-quarter dip due to supply constraints.What to Watch:If demand for RTX GPUs remains strong despite price hikes.Signs of consumer weakness—is spending softening in the gaming market?Any hints at next-gen GPUs (RTX 5000 series) that could boost future sales.
? Data Centers: The AI Infrastructure Play
Expected: AI and cloud demand driving massive revenue growth (~112% YoY).What to Watch:Hyperscaler spending trends—are cloud giants still ramping GPU orders?Competition from AMD (MI300X) and Google/Amazon custom chips—is Nvidia still dominating?AI inference market growth—how is Nvidia expanding beyond training chips?? Bullish Scenario: If AI growth remains explosive, Nvidia clears supply issues, and hyperscalers continue ramping GPU orders, expect upward momentum post-earnings.
Traders should watch how these segments perform in relation to expectations, as that will likely determine whether Nvidia extends its rally or sees a pullback.
NVDA is trading near the midpoint of its 48-day range ahead of earnings.Options market implies a 10.6% move, but history suggests a more realistic 7% move.Projected post-earnings range: $117 - $141, with deeper reaction zones at $113.50 and $144.50-$146.50.Best trading strategy? Fading extreme moves rather than chasing breakouts.
Current Market Positioning: Where Is NVDA Now?
The market is pricing in uncertainty, but NVDA is neither at an extreme high nor an extreme low, reinforcing a neutral positioning that makes chasing breakouts riskier. Instead, fading price extremes at key levels offers a higher-probability strategy.
The front-month implied earnings straddle suggests a ±10.6% expected move.Based on historical earnings trends, actual post-earnings moves are closer to two-thirds of that, approximately 7%.
Post-Earnings Price Range Projections for Nvidia
Assuming NVDA closes at $128.25 pre-earnings, the possible price range is:
Full 10.6% expected move: Upside: $141.75Downside: $114.50More realistic 7% move: Upside: $141Downside: $118.50Volume Profile and Order Flow Considerations for NVDA Stock Upon Earnings
$117 - $119: Likely area for short-covering or an unsustained breakout down before a reversal up.$113.50: A deeper liquidity zone where a stronger reaction is expected.$144.50 - $146.50: An extended level where long traders may take profits, increasing the probability of a reversal lower.$109 - $111: If NVDA extends beyond expected volatility to the downside, this level is where buyers will likely step in, even for a swing-long trade.
Three key perspectives emerge:
Price is near the middle of the expected range.The options market provides a sense of where volatility is likely contained.Volume profile data fine-tunes precise areas where liquidity-based reversals are probable.Contrarian thinking at extended levels: When NVDA reaches extreme price zones, the herd mentality often leads to emotional decisions, creating high-probability contrarian opportunities.
If NVDA drops to $110 or lower, most traders may be frantically selling, fearing further downside.Volume profile analysis suggests this is a key liquidity zone where institutional buyers may step in.Instead of selling, a contrarian approach would be to look for signs of stabilization and a reversal to go long.
Selling near $146 if euphoria takes over:
If NVDA surges to $146+ after a strong earnings report, retail traders may chase the move, expecting new all-time highs.However, volume profile suggests this zone is where large players may take profits, leading to a potential pullback or reversal.A contrarian approach would be to monitor for signs of an unsustained breakout up and look for short opportunities.Don’t fade moves immediately—wait for clear signs of a failed breakout or a sustained reversal.Use your own strategy and risk management to ensure a well-timed trade execution.
The ideal strategy is to fade extreme moves rather than chase them. Here’s why:
Traders overpay for options, leading to exaggerated implied moves.Option sellers (market makers) capitalize on this sentiment.
NVDA is near its midpoint, not at an extreme.
Breakouts tend to fail more often than they succeed when a stock is not near a key high or low.Algos are more likely to fade extremes (shorting extended rallies, buying sharp dips).Key Resistance and Support Levels for Fading Moves:
Upside Resistance for Fades: $141: A key level where unsustained upside moves may reverse lower.$144.50 - $146.50: A higher probability sell zone, where longs take profits.Downside Support for Fades: $117 - $119: First area for potential short-covering and a bounce.$113.50: A better risk-reward zone for buyers.$109 - $111: Deeply extended buy zone for a long-term swing position.For Long Trades (Buying Dips):
Wait for a move below $118.5, ideally stabilizing around $117-$119.If $113.50 is reached, stronger buyers are expected to step in.Upside targets: $126.75 (December low) or $132.5 (mid-range level).If price spikes toward $141 - $146.50, look for reversal signals to go short.$145.60 is a key VAH zone from January 22 & 24, meaning liquidity-based selling is likely.Target: A pullback to $132.5.
A Structured Playbook for NVDA Earnings, But This Is Only An Opinion
Use this as an opinion about how to play NVDA earnings tonight, or at least take some data-backed price levels mentioned into considerationThe options market suggests a large move, but history supports a more tradable 7% range.NVDA is near the midpoint of its multi-week range, making breakout chasing unreliable.Best trade? Wait for extremes (either $113.50 - $119 or $141 - $146.50) and fade the move back toward equilibrium.Avoid going long near $145+ or short near $117—instead, let price reach key reaction zones before entering trades.Visual Guide: NVDA’s Expected Earnings Range and Key Trading Zones
By following this approach, traders can be prepared, not reactive, and operate with a logical trading map rather than emotional bias. While anything can happen—NVDA could break down 17% or rally to new highs—the focus here is on a structured, high-probability strategy rather than speculative bets.
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This article was written by Itai Levitan at www.forexlive.com. Read More Details
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