Wall Street traders think next week's earnings report from Nvidia is likely to give the chip stock another boost, according to one interpretation of options market pricing. A Piper Sandler research note on Thursday from Benson Durham and Melissa Turner said short-term options on Nvidia look expensive, but that high cost is tilted toward options that serve as bets the stock will rise. "What's noteworthy is that near-term upside is the dearest, not the downside.
So, expensive NVDA options in general don't connote very much investor angst heading into the release," the Piper Sandler report said. Nvidia is set to report fiscal second-quarter results Aug. 28 for the quarter that ended in July, and the results could serve as a gut check not only for the chipmaker, but also for the entire stock market.
The stock is up 171% over the past year and is one of the three largest stocks in the S & P 500 measured by market value, along with Apple and Microsoft . Nvidia's meteoric rise suffered a bit of a swoon this summer. The stock closed at $98.
91 per share on Aug. 7, about 27% below its all-time high in June. But the stock has since erased most of those losses, closing at $123.
80 per share on Thursday. NVDA YTD mountain Nvidia's rally has been a key driver of this bull market. The market optimism about Nvidia extends beyond the immediate period after the earnings report, according to Piper Sandler.
"We focused on shorter-dated options, largely on account of next week's release. However, .