Insights 
VT 
Nvidia’s earnings report showed an adjusted EPS of $1.05, which was above the anticipated $1.00. Their revenue reached $46.74 billion, exceeding the expected $45.51 billion. Despite these results, the Q3 revenue forecast of $52.9 billion to $55.1 billion fell short of the anticipated $53.46 billion. Alongside this, Nvidia introduced a $60 billion share buyback program.
The revenue details showed data centre earnings at $41.18 billion, slightly below the projected $41.29 billion. Gaming revenue came in at $4.3 billion, above the expected $3.828 billion. Compute revenue, however, was down at $33.84 billion, missing the anticipated $35.87 billion.
Nvidia’s Outlook
Notably, Nvidia’s outlook excluded potential H20 shipments to China, with no H20 sales recorded to China-based customers in the second quarter. These elements, including unmet some revenue expectations, might be affecting market sentiment, regardless of the EPS performance.
The slight earnings beat is being overshadowed by the softer Q3 revenue forecast. This creates a classic conflict between past performance and future expectations. For us, this suggests a period of price consolidation or increased volatility rather than a clear directional move in the immediate short term.
The revenue miss in the data center and compute segments, combined with a cautious outlook that excludes new China sales, provides a solid case for bearish positions. We’re seeing open interest for puts expiring in late September 2025 rise by over 15% in pre-market activity. This suggests traders are buying protection or speculating on a drop towards key support levels seen earlier this summer.
Share Buyback and Market Impact
On the other hand, the announced $60 billion share buyback program provides a significant safety net under the stock price. We saw a similar situation back in 2024, where post-earnings weakness was quickly erased as the buyback was initiated, rewarding those who sold cash-secured puts. The strong gaming revenue also shows resilience in the consumer-facing side of the business.
Given these conflicting signals, the most direct play may be on volatility itself. Implied volatility for NVDA options has jumped to its highest level since the Q1 2025 report, making strategies like long straddles or strangles attractive for the coming weeks. With the broader market’s VIX index already elevated near 18, traders are clearly bracing for a decisive move once the dust settles.
It would be prudent to observe the price action for a few sessions to see if a clear trend emerges from this initial indecision. This comes as the Federal Reserve has signaled a continued pause on rates, making the market highly sensitive to growth guidance from tech leaders like Nvidia. Pay close attention to volume on out-of-the-money weekly options, as that will be the first indicator of institutional positioning.
