Nvidia, the "number one stock in the universe," is about to release its second quarter financial report after Wednesday's trading hours Eastern Time.
Goldman Sachs predicts that as the most closely watched stock in the world, Nvidia's financial report may cause its stock price to fluctuate significantly by more than 9%. As of Tuesday's close, Nvidia's market value was $3.15 trillion. This means that its market value may fluctuate significantly by $298 billion - higher than the total market value of 95% of companies in the S&P 500 index.
Goldman Sachs: The market may be caught off guard
As of now, Nvidia still holds the record for the largest daily market value fluctuation in US stock history: $330 billion, which was set at the end of July this year when Nvidia's stock price rebounded from weeks of painful decline.
Goldman Sachs' trading department predicts that Nvidia's latest financial report may cause a 9% volatility based on recent option pricing data. Goldman Sachs stated that if Nvidia's financial report shows steady quarterly growth and provides stronger forward guidance, it may surprise the stock market and lead to a significant increase in stock prices.
Can you imagine that Nvidia's financial report on Wednesday will exceed expectations? "Asked Scott Rubner, Managing Director of Goldman Sachs' trading division.
Goldman Sachs pointed out that global investors have been net selling technology stocks in the past few weeks: "Information technology stocks have experienced net selling for the fourth consecutive week and have set a record for the largest net selling in the past two months, as driven by both long and short positions, these stocks (information technology stocks) have seen net selling in every region
In other words, stock market positions indicate that if Nvidia rises after announcing its results on Wednesday, most investors may be caught off guard.
The overall impact on the US stock market is enormous
Nvidia is currently the second most valuable company in the S&P 500 index, with a weight of approximately 6.5%, so its performance may have a significant impact on the overall market.
In fact, Steve Sosnick, a strategist at Interactive Brokers, has emphasized the importance of Nvidia in other markets.
On Tuesday Eastern Time, Sosnik analyzed the top 25 most active trades on the Interactive Brokers platform, with over 70% of trades related to Nvidia.
The top ranked company is Nvidia, followed by Tesla - which is also Nvidia's main customer. Nvidia's main competitor AMD ranks third, and the semiconductor ETF ranks fourth.
Sosnik stated that overall, Nvidia is associated with 18 of the top 25 most active trades at Interactive Brokers.
We have become accustomed to seeing Nvidia occupy the top spot on the leaderboard, which reinforces its crucial role in investor psychology. In addition, it is evident that the company plays a crucial role in influencing other widely popular investment tools, "said Sosnik.