Nvidia shares could see big moves on earnings. How to capitalize on the potential swings

Key Points:

• Nvidia's stock is approaching its recent $215 breakout support zone ahead of earnings on May 20, with options markets pricing in an 8.1% move, creating an attractive environment for premium sellers.
• Institutional investors have shifted toward targeted put selling around the $220–$225 range, signaling confidence in a post-earnings support level and willingness to monetize earnings volatility.
• Despite the pullback, Nvidia trades at a discount to semiconductor peers while maintaining superior growth, margins, and AI revenue visibility, supported by ongoing product ramps and a strategic partnership with OpenAI.
• The bullish outlook is reinforced by Nvidia's AI infrastructure leadership, with Blackwell in volume production and the Vera Rubin platform extending the product cycle through fiscal 2027, alongside a multiyear demand visibility from the OpenAI collaboration.
• A recommended options strategy involves selling a defined-risk put vertical spread to capitalize on elevated implied volatility and support near $220, aiming to benefit if Nvidia holds its breakout zone through earnings.