Key insights
- The article discusses prediction markets wagering on specific words Nvidia's CEO might use during the earnings call, reflecting investor sentiment. Positive signals include Huang's invitation to Trump's China summit and approval for advanced chip sales to China, contributing to NVDA's recent outperformance. Traders are also betting on Nvidia exceeding EPS estimates. This suggests a bullish sentiment surrounding Nvidia's earnings, potentially influencing US equity markets positively.
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You can parse Nvidia's next earnings report for the latest on profit margins and the AI buildout. Or you can just bet on the words that will come out of Jensen Huang's mouth.
Nvidia (NVDA) is set to report its latest results Wednesday, and some traders are focused on the latter. Prediction-markets betters are putting money on what they think Huang, its CEO—or other members of the company's staff—will say during its earnings call, part of a search for new ways to profit from corporate news beyond share-price movements. (If you're more interested in what might happen to Nvidia's stock after it reports, click here.)
"Gaming" is the most popular bet—and an obvious one, since it is one of the key markets in which Nvidia specializes. Other favorites include "hyperscaler," "omniverse," and "H20," all of which refer to some element of the business and have been uttered during past earnings calls, according to transcripts provided by AlphaSense. (Odds are lower for "domestic" and "Trump," with traders placing a less than coin-flip chance of those making the cut.)
Prediction markets aren't the main venue for evaluating what traders think stocks will do, but they do offer some insight on investor sentiment for certain companies' shares.
These wagers are being made at a generally positive time for the stock. Shares of Nvidia outpaced the rest of the Magnificent 7 last week, closing over 4% higher, after Huang got a last-minute invitation to President Donald Trump's China summit and the administration signed off on some advanced chip sales to the country.
Some event contracts across Polymarket and Kalshi with high perceived odds of occurring might seem like no-brainers. Traders on Polymarket appear all but certain, for example, that the chipmaker's first-quarter adjusted EPS will come in higher than the Street's consensus estimate of $1.77.
Traders also appear to align with Street analysts on Nvidia's first-quarter data center revenue and overall gross margins. They place a 95%-plus likelihood that data center sales will come in above $65 billion, compared to analysts expectations of around $73 billion, according to Visible Alpha. The most popular bet for quarterly gross margins—for them to land between 75% and 76%—is also where Street estimates land.
The more uncertain, and potentially lucrative, prediction market bets on Nvidia have to do with where its stock will go this month. The favored outcome was recently $240, with traders placing a 68% probability on the stock reaching a new all-time high.
Bettors stand to make a lot more on a trade that has shares of the company going to $160, a 1% bet—but that would. require the stock to fall almost 30% from Friday's close.
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