Key points:

  • Analysts are forecasting significant growth after earnings report on May 22.
  • Volatility may be lower than last quarter.
  • Potential growth: up to 8.7%, representing a $200 billion change in market cap.

Analysts are predicting a significant rise in Nvidia stock prices following the company’s earnings report on Wednesday, May 22. However, US options markets indicate that volatility expectations are lower than in February, when the previous report was published.

Nvidia stock options could rise 8.7% in either direction by Friday, according to Trade Alert, a data analytics firm. This means the potential change in market capitalization could be $200 billion, which is larger than the market capitalization of approximately 90% of the companies in the S&P 500 index.

How much can Nvidia stock rise?

Despite the company’s impressive performance, Nvidia’s projected stock growth falls short of the previous surge following its latest quarterly report. Growth is expected to be 8.7%, down from the 16.4% jump last quarter. It’s also below the average forecast of 12% that traders have made over the last eight quarters.

Still, Nvidia shares, up about 87% this year, remain a leader in the fast-growing artificial intelligence industry. The company’s market capitalization is about $2.3 trillion, making it the third-largest company on Wall Street after Microsoft and Apple.

Wall Street investors are expecting another strong quarterly report from Nvidia. In recent months, interest in Nvidia stock has spread to other artificial intelligence companies. BofA strategists forecast Nvidia will contribute 9% to S&P 500 earnings growth over the next 12 months, up from 37% over the past 12 months.

Expert predictions for Nvidia

Despite the growth forecasts, Nvidia’s upcoming earnings report shouldn’t leave its mark on the company’s stock price. Options traders are allowing for further gains in the stock despite its strong year-to-date rise. At the same time, they expect price movements to be both up and down.

Nvidia forecast earnings of $5.59 per share and quarterly revenue to rise to $24.65 billion, up from $7.19 billion a year ago, according to LSEG. At the same time, a drop in Nvidia shares could shake investors’ confidence in the prospects of the broader AI sector.