--- title: "\"Can the 'earnings report curse' be broken? NVIDIA's stock price adjusts before earnings, making it difficult for options bulls to navigate" type: "News" locale: "en" url: "https://longbridge.com/en/news/286842299.md" description: "On the eve of the earnings report, NVIDIA's stock price has significantly retraced, putting bulls in a difficult position. The stock price has dropped more than 6.5% from last Thursday's peak, leading to a substantial decrease in the value of many options contracts, with some contracts even going to zero. Nevertheless, bulls have not given up, and options trading volume remains active" datetime: "2026-05-19T02:13:06.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286842299.md) - [en](https://longbridge.com/en/news/286842299.md) - [zh-HK](https://longbridge.com/zh-HK/news/286842299.md) --- # "Can the 'earnings report curse' be broken? NVIDIA's stock price adjusts before earnings, making it difficult for options bulls to navigate According to Zhitong Finance APP, this week the market's focus is on AI giant NVIDIA (NVDA.US), which will announce its Q1 financial report for the fiscal year 2027 after the U.S. stock market closes on May 20 (Wednesday). As a core barometer that influences the technology sector and even the overall market direction, NVIDIA's performance has long surpassed the individual stock category, affecting the investment sentiment across the entire market. However, on the eve of the financial report release, NVIDIA's stock price has significantly retraced, putting bulls in a difficult counter-trend battle. **NVIDIA's stock price declines before earnings, bulls position against the trend** A classic saying in the options trading circle goes: "Sell a tiny, buy a Lamborghini," which straightforwardly means "short cheap options, ultimately buy a Lamborghini." This phrase accurately summarizes a high-probability options trading strategy: traders sell low-priced, out-of-the-money options with little hope of being exercised, steadily earning premiums. Over time, these small gains can accumulate into considerable profits. In contrast, the buyers of these cheap options often end up losing their entire investment. This Monday's price movement of NVIDIA's stock is a true reflection of this trading logic. NVIDIA's stock price fell on Monday, dropping more than 6.5% from last Thursday's high, which led NVIDIA options traders to face another challenging trading day, with a large number of popular short-term call options losing significant value or even going to zero. Data compiled by SpotGamma shows that as of Monday noon, over 15% of NVIDIA options contracts were set to expire at the close of the day. The most popular contracts included call options with strike prices of $225 and $222.5, each with trading volumes exceeding 220,000 contracts. Regrettably, these contracts were still in-the-money last Friday but became worthless due to the stock price retracement in just one trading day. This mirrors the situation from last Friday when call options with a strike price of $235, totaling $114 million in premiums, evaporated entirely as NVIDIA's stock price fell, resulting in heavy losses for short-term investors who followed the trend. Despite the continuous weakness in stock prices and frequent "blow-ups" in short-term options, the bulls have not surrendered. On Monday, NVIDIA's options trading volume ranked fifth in the market, second only to the benchmark index and Tesla, with a trading volume exceeding 3 million contracts and a total options premium size surpassing $1.3 billion, of which call options accounted for as much as $1 billion. According to ThinkOrSwim data, on Monday, the trading volume of NVIDIA call options was more than twice that of put options, but most call options were traded at the bid price or lower, indicating that these call options were likely sold by investors rather than actively bought. Even so, there are still strong bullish forces in the market positioning against the trend. On that day, four large NVIDIA options trades were all significant purchases of high-priced in-the-money call options expiring this Friday, with each transaction amounting to no less than $10 million. This indirectly reflects that some professional investors remain optimistic about NVIDIA's earnings performance and are willing to bet on a rebound in stock price due to better-than-expected results. According to data from the Chicago Board Options Exchange (Cboe) LiveVol, traders expect NVIDIA's stock price to fluctuate by up to 6.25% around the earnings report, which is basically in line with usual expectations but higher than the average actual volatility of 3.2% For investors currently holding call options, the situation is particularly severe. Historical data shows that NVIDIA's stock price has fallen after its last three earnings reports, with a significant drop of 5.5% following the earnings report released in February this year, as the shadow of the "earnings report curse" continues to loom. It is easy to imagine the difficulty for bulls to turn the tide in this earnings report. **How important is NVIDIA's earnings report?** Ultimately, the options game ahead of NVIDIA's earnings report is essentially a reflection of the market's divergence regarding the future trajectory of the AI leader. After the U.S. stock market closes on Wednesday, with the earnings report's release, this long-short game will reach a phase of answers, and NVIDIA's performance will not only affect its own stock price but will also become a "weather vane" for the AI sector and the overall tech stocks, guiding the direction of subsequent market trends. The market generally expects NVIDIA's first-quarter earnings per share (EPS) to be $1.76, with revenue of $78.75 billion, significantly higher than the company's EPS of $0.96 and revenue of $44.06 billion in the same period last year. Revenue from the data center business is expected to reach $72.85 billion, far exceeding last year's $39.11 billion. According to reports, ahead of the earnings report, several major Wall Street firms hold an optimistic view on NVIDIA and have raised their target prices: Bank of America raised NVIDIA's target price from $300 to $320, Wells Fargo significantly increased its target price from $265 to $315; UBS raised its target price from $245 to $275; Morgan Stanley raised its target price from $260 to $285. It is noteworthy that NVIDIA's CEO Jensen Huang recently completed a visit to China with senior U.S. officials, and comments regarding cooperation with China during this earnings report will become a market focus. Previously, it was reported that the U.S. had approved industry giants such as Alibaba, Tencent, and ByteDance to purchase NVIDIA's H200 series chips, which also once propelled NVIDIA's stock price to a historic high, with a market value surpassing $5.7 trillion. However, UBS analyst Tim Arcuri pointed out that investors have been cautious in recent months, and only an absolutely outstanding earnings report can fully restore market confidence. As of Monday's close, NVIDIA fell 1.33% to $222.32, with a cumulative increase of 19% in stock price this year ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) ## Related News & Research - [$100 Invested In GraniteShares 2x Long NVDA Daily ETF 5 Years Ago Would Be Worth This Much Today](https://longbridge.com/en/news/286320411.md) - [Nvidia’s AI Lead Is Back in Focus as Wolfe Research Doubles Down](https://longbridge.com/en/news/286680544.md) - [Nvidia Will Report Q1 Earnings on May 20 — Options Traders Expect an 8.65% Move in NVDA Stock](https://longbridge.com/en/news/286763191.md) - [Nvidia earnings on May 20 could sway AI market sentiment](https://longbridge.com/en/news/286642553.md) - [Nvidia surpasses silver as world’s second-largest asset](https://longbridge.com/en/news/286453233.md)