Why Nvidia (NVDA) Stock Faces Sell-the-News Risk Following Its Q2 Earnings Report
Josh Enomoto
Thu, July 23, 2026 at 7:17 PM GMT+5:30
4 min read
- NVDA
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Given the astonishing historical performance of semiconductor giant Nvidia (NVDA), it’s only natural that the general atmosphere for NVDA stock is optimistic, especially ahead of its second-quarter earnings report (scheduled for release on Aug. 26). First, you may consider the Barchart Technical Opinion indicator, which rates the ticker as an 80% Strong Buy, with a strengthening short-term outlook cited as evidence
You can also look at the latest print. While a year-to-date performance of roughly 14% isn’t groundbreaking, NVDA stock had previously succumbed to an extended downturn. However, this dynamic appears to be reversing, with shares up 6% in the trailing month
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Next, you have to factor in how analysts love Nvidia stock, with the consensus currently pegged at just over $304. Fundamentally, experts highlight positives such as new, advanced semiconductor architectures, along with robust AI infrastructure capex commitments. Also, per Google Finance’s info page for NVDA, 35.5% of financial articles are bullish, while only 6.5% are bearish
Of course, we have to keep in mind that a consensus of opinions — especially in a non-deterministic system like the equities market — isn’t necessarily the arbiter of truth. That is to say, it could very well be that NVDA stock is a buy. However, an abundance of optimistic opinions doesn’t automatically validate the underlying hypothesis
What‘s really worrying is that the smart money doesn’t seem particularly enthused about the post-earnings potential of Nvidia stock
Bullish on NVDA Stock? The Smart Money Isn’t Biting
You’d think that for all the waxing poetic about generative AI and Nvidia representing a cornerstone investment that the most sophisticated market participants would be gobbling up NVDA stock. But if the volatility skew for the Aug. 28 expiration date — just two days after Nvidia’s Q2 report — is any indication, the picture is much more nuanced
Essentially, the shape of the skew is that of a “smirk” — options traders are not only paying an elevated implied volatility (IV) premium for out-the-money (OTM) puts but the more OTM the puts are, the greater the IV. On the other end, the IV for at-the-money (ATM) calls is about the same as the IV for OTM calls
