Nvidia’s highly anticipated Q1 earnings are here alongside a geopolitical reality check: CEO Jensen Huang confirmed that its market share in China has officially dropped from over 90% to zero following a failed diplomatic chip-import push with President Trump.
Despite the loss of Chinese revenue, Wall Street expects a monster print with an EPS of $1.76 on $78.75 billion in revenue, driven by a projected $72.85 billion from its data center business. However, competitors are advancing aggressively. Cerebras successfully went public last week touting a faster alternative architecture, AMD is prepping its rack-scale server rollout, and Amazon’s custom chip segment has breached a $20 billion annualized run rate with massive multi-gigawatt Trainium deals alongside Google’s newly unveiled TPU 8i/8t infrastructure expansions.
Trading Analysis
Options markets are pricing a massive post-earnings move, making the June settlement highly sensitive to tonight’s forward guidance. Traders must assess if Nvidia’s projected $1 trillion Blackwell/Rubin pipeline can outpace the diversifying infrastructure spend of its biggest customers.
Bullish signals for Nvidia:
- Hyperscaler budgets are expanding to sustain Nvidia’s targeted mid-70% gross margins.
- Strong forward guidance to solidify its path to becoming the world’s first $6 trillion company.
Bearish signals:
- Tail risk if Microsoft or Meta decide to slow down hardware deployment.
- Alternative architectures gaining capital after Cerebras’ IPO and Google’s direct-to-customer TPU 8 series sales.
The premium on Nvidia “YES” contracts is exceptionally high, pricing in near-perfection. Given that options markets are bracing for a large swing, the tactical play is to fade extreme post-earnings spikes above a 94% implied probability. If Nvidia delivers a typical beat-and-raise but notes constraints on Blackwell, expect a “sell the news” macro rotation. Savvy traders should use the volatility to buy mispriced “NO” on Nvidia to capture a pullback before the June close.