The Eagerly Awaited Earnings
Nvidia Corp NVDA is gearing up to unveil its fiscal second-quarter 2025 earnings report post-market close tomorrow. Analysts are mostly optimistic about NVDA stock, but uncertainties loom, setting the stage for a market tussle. Agile traders eyeing opportunities on both sides of the fence may find a fertile ground for nimble profit-taking.
The Wall Street Lens
Wall Street pundits project Nvidia to clock earnings per share (EPS) of 64 cents this quarter, a significant leap from 25 cents (split-adjusted) in the prior-year period. Revenue-wise, analysts are eyeing $28.68 billion, dwarfing the $13.51 billion in fiscal Q2 2024.
All ears are perked for management’s stance on artificial intelligence, as Nvidia has soared over 2,918% in the last five years on the back of its cutting-edge graphics processors. These specialized chips serve as the backbone for various AI applications, making Nvidia a linchpin in the AI innovation race.
The Swaying Sentiments
Despite the bullish sentiment, Steve Grasso, a notable trader and analyst, recently offloaded his Nvidia holdings ahead of the Q2 report, intending to re-enter after NVDA “trades a bit.” Meanwhile, Goldman Sachs sounded caution, predicting a trillion-dollar influx in AI investments but expressing doubt on the ensuing productivity gains.
Choppy Waters Ahead?
Given the diverging views, NVDA stock might witness turbulence in the forthcoming sessions. While Nvidia is anticipated to beat earnings projections, the stock’s trajectory could hinge on the beat’s scale. In Q2 last year, Nvidia saw an earning surprise of 31.6%, with a gradual dip to 9.8% by fiscal Q1 2025.
Directing the Tug-of-War: The ETFs
Amid the swirling uncertainty around NVDA stock, Direxion’s NVIDIA-centric exchange-traded funds present avenues for trading jousts. Bulls may look to Direxion Daily NVDA Bull 2X Shares NVDU, a leveraged ETF seeking to deliver 200% of NVDA’s daily returns.
On the flip side, bearish investors can tap into Direxion Daily NVDA Bear 1X Shares NVDD to short the semiconductor giant, with NVDD tracking 100% of NVDA’s inverse performance.
The NVDU ETF: Bulls in Amplified Action
NVDU has closely shadowed NVDA stock but with escalated vigor. The 2X fund surged nearly 298% since the year’s commencement, outstripping NVDA’s 162.5% rise during the same period.
Journey of NVDD ETF: Struggles of the Bears
In contrast, the NVDD ETF faced a bumpy road, shedding over 68% since January’s dawn as NVDA stock powered northwards, leaving key support levels unguarded.