The biggest stock in the market reports earnings tomorrow.
I’ve waited weeks for this setup:
My NVDA trade plan.
Every quarter, Wall Street circles one date in red ink…
Tomorrow, May 20, NVIDIA Corporation (NASDAQ: NVDA) reports earnings after the close.
The tech sector has been on fire for over a month.
- Intel Corporation (NASDAQ: INTC) on April 23.
- Advanced Micro Devices Inc. (NASDAQ: AMD) on May 5.
- Cisco Systems Inc. (NASDAQ: CSCO) on May 13.
Three straight beats. Three explosive moves higher.
Now the king of the AI trade steps up to the plate, and the options market is pricing in a move of 5-10% off this print.
The Setup Going Into Earnings
Three blowout reports from the AI ecosystem have built the anticipation for NVDA.
April 23: INTC reported $13.6 billion in revenue against $12.4 billion expected. EPS of $0.29 against a $0.01 estimate. The stock gapped up 24% the next day, its biggest single-day move since 1987.
Data Center and AI revenue jumped 22% year-over-year. Wall Street was caught flat-footed.
Then May 5: AMD reported $10.3 billion in revenue and $1.37 EPS, both beats.
Data Center revenue surged 57% year-over-year to $5.8 billion. Q2 guidance of $11.2 billion blew past the $10.5 billion analysts modeled. AMD jumped roughly 15-20% on the print.
Two weeks later, on May 13: CSCO confirmed the sector momentum. Revenue of $15.8 billion, EPS of $1.06, both beating.
The AI infrastructure order target for the year was raised from $5 billion to $9 billion. And the stock surged 13-15% the very next trading session.
My CSCO report before the earnings.
Three for three. AI infrastructure is the trade, and NVDA is the one company that every report talks about.
What Wall Street Expects
Here’s the consensus heading into tomorrow:
- Revenue: $78-79 billion (roughly 78% year-over-year growth)
- Non-GAAP EPS: $1.77-1.78
- Data Center revenue: $73 billion (near 90% of total)
- Q2 revenue guide: ~$86 billion consensus
Here’s the key thing to know about NVDA going into earnings: a beat alone is already in the price.
If the print lands at $78-79 billion on revenue and the Q2 guide comes in light, this stock could pull back hard, despite the monster revenue numbers.
If revenue clears $80 billion in a big way and the Q2 guide pushes past $86 billion, we could see another INTC-style gap.
How To Trade NVDA
The chart says everything I need to know about levels:
NVDA is trading near $222 after pulling back from the all-time high of $237 last week.
The stock has rallied from $165 on April 7. That’s a 35% move in six weeks.
Here are the levels I’m marking on the chart before the open tomorrow:
- The all-time high near $237: It’s the first ceiling bulls have to clear and hold on a beat.
- The prior breakout level around $215: The price could test/bounce off this level after an initial pullback.
- The round number at $200: This is solid psychological support that lines up with the bounce in early May.
Most importantly: I’m not predicting a direction. I’m waiting for the price action to confirm one…
Then I use support and resistance to plan a smart trade
The Bigger Picture
Three out of four stocks follow the market. But right now, NVDA is the market.
This earnings report sets the tone for every AI name through the summer. A clean beat with a raised guidance gives the entire tech sector another leg higher.
A miss or a soft report takes the air out of the rally that INTC, AMD, and CSCO just delivered.
Either way, the move tomorrow will be big.
And when stocks make big moves, we have more opportunities to gain.
Be good (and be good to others),
Ben Sturgill
*Past performance does not indicate future results. Not typical.
