Nvidia reported quarterly revenue of $96.22bn, above the $92.17bn consensus and double the level in Q2 2025. Net income also doubled year on year to $53.95bn, equal to $2.22 per share versus $1.87 previously. For the current quarter, the company guided to sales “crossing” $100bn and reaching $108bn, around $4bn ahead of forecasts, despite expecting no data centre sales to China. It added a further $26bn share buyback programme and declared a dividend, while the stock rose by more than 4% in post-market trading after four straight quarters of post-earnings declines.
Revenue composition showed data centre sales of $92bn, with 92% of total revenue coming from the data centre and chip sales unit. Hyperscalers generated $48.7bn, while Nvidia Cloud, industrial and enterprise customers contributed $40.3bn, up more than 100% year on year. Net income included a $7.8bn gain from equity investments, including Intel and SpaceX. Nvidia said it would double supply commitments to $279bn, largely tied to memory costs; Micron shares rose more than 3% post-market, and the report referenced $220 and $235 as potential share-price levels.
Options Market Strategy Following Strong Earnings
With Nvidia breaking its four-quarter streak of post-earnings drops today, we believe derivative traders should immediately shift toward aggressive, bullish positioning. Given that Nvidia options frequently command over 20% of the entire U.S. single-stock options market volume, liquidity is highly favorable for taking clean, leveraged positions. We recommend buying call options targeting the $220 level, as the stock looks primed to run toward its previous high of $235 in the coming weeks.
Capitalizing on Supplier Derivatives and Managing Volatility
For traders looking to avoid the high premiums of Nvidia itself, the company’s massive $279 billion supply commitment makes supplier derivatives an attractive alternative. We suggest looking at call options on key partners like Micron Technology, which has historically shown a strong correlation with Nvidia’s upward cycles. Utilizing bull call spreads on these suppliers will allow us to capture the inevitable multi-week supply chain rally while keeping capital costs relatively low.
We must also account for the typical post-earnings drop in implied volatility, which can quickly shrink the value of single options contracts. To protect against this volatility crush, we recommend implementing diagonal spreads or calendar spreads that benefit from time decay on shorter-term contracts while keeping long exposure to the upside. This balanced approach will help us safely ride this historic AI wave over the coming weeks without overexposing our portfolios to sudden market pullbacks.
