Nvidia options signal $280B swing as traders watch AI demand

Options markets price a potential $280 billion swing in Nvidia's market capitalization following its Wednesday earnings report, implying a 5.4% move in either direction on Thursday. This expected move is smaller than the 6.5% priced before May's results and below Nvidia's historical post-earnings average of 7.4%. The reduced implied volatility suggests traders anticipate a more predictable reaction, with some analysts noting the era of dramatic 10-20% surprises may be over. Nvidia shares have fallen for seven consecutive sessions but remain up 11.7% this year, while rising Treasury yields add pressure to tech valuations. Analysts remain bullish, with price targets up to $350, citing projected earnings of $17 per share for 2027 and $25 for 2028. However, Nvidia's growing role in financing AI infrastructure, including guarantees and funding agreements, has pushed credit default swap spreads to record levels near 85 basis points.