Shares of Nvidia Corp., a chipmaker at the center of the artificial intelligence spending boom, fell to their lowest level in three weeks amid concerns over the company’s growth prospects. Some predict that Nvidia’s stock price will decline further.
Between 2 p.m. and 2:40 p.m., a trader bought more than 300,000 contracts, betting that Nvidia’s share price would fall to $115 on March 7 – a 12% drop from Wednesday’s closing price. The last time the stock was at that level was in mid-September.
This was the most actively traded options contract on U.S. exchanges on Thursday.
The day before, the chipmaker had reported quarterly results that were decent but not outstanding, disappointing investors who were accustomed to blowout performances. This bearish trade likely exacerbated the stock’s weakness on Thursday, sending its share price to its biggest drop in a month.
Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, said that since the contracts began to be purchased in the afternoon, the stock has dropped by about 3% and the implied volatility of the options has risen by 8 points.
Murphy said, “This put buyer is capturing next week’s State of the Union address and non-farm payrolls,” referring to the monthly jobs data and President Trump’s scheduled speech to be released next week.
Data compiled by Bloomberg shows that bearish bets have pushed Nvidia’s put trading volume to more than double the 20-day average. As many as 2,900 contracts changed hands.
There was another trading rush in the last 30 minutes of the trading session, with the total trading volume increasing by another 100,000 lots. For Murphy, this might indicate that the investors who bought put options earlier in the day were taking profits.
Nvidia Corp., the chipmaker at the center of the artificial intelligence spending boom, reported decent but not outstanding quarterly results, disappointing investors who have grown accustomed to blowout performances.
Nvidia said on Wednesday that its first-quarter sales for the fiscal year ending in April would reach approximately $43 billion. Analysts had previously expected an average of $42.3 billion in sales, with some estimates as high as $48 billion.
The company also warned that its gross margin would be lower than expected due to its rush to launch a new chip design called Blackwell. In addition, US tariffs could also affect its performance.
The outlook for the artificial intelligence industry is mixed. Nvidia’s share price has dropped this year amid concerns that data center operators will slow their spending. The Chinese start-up DeepSeek has also raised concerns that chatbots can be developed cheaply, which could reduce demand for Nvidia’s powerful AI chips.
Although Nvidia executives have addressed most of the issues, it is becoming increasingly difficult for the company to release a sensational earnings report.
