Nvidia Corp NVDA is poised to unveil its long-awaited earnings report for the
fiscal second quarter of 2025 after the closing bell tomorrow. Despite analysts predominantly favoring NVDA
stock, swirling uncertainties have set the stage for a battle of wills. This sets the scene for agile traders
seeking to capitalize on both bullish and bearish scenarios.
Surveying sentiments on Wall Street, industry pundits project Nvidia to achieve earnings per share (EPS) of 64
cents. In the comparable quarter of the prior year, the company reported an EPS of 25 cents (post-split). Revenue
projections stand at $28.68 billion, a significant leap from the $13.51 billion recorded in fiscal Q2 2024.
Analytically, all attention is trained on management’s prowess in articulating a compelling narrative around
artificial intelligence. Over the past five years, NVDA stock has surged by over 2,918%, largely driven by its
cutting-edge graphic processors. These specialized chips underpin various AI frameworks, positioning the company
as a vital player in the pursuit of machine intelligence.
Yet, not everyone is convinced of NVDA’s continued upward trajectory. Notably, trader and market analyst Steve
Grasso recently divulged his sale of all Nvidia holdings ahead of the Q2 report. Moreover, the expert hinted at
allowing NVDA to “find its footing” before contemplating a potential reentry.
Significantly, several months ago, Goldman Sachs forecasted that enterprises would funnel over $1 trillion into AI
endeavors in the upcoming years. However, the investment titan expressed reservations about the potential returns
justifying such colossal investments.
With diverse perspectives abounding, the road ahead for NVDA stock may be turbulent. While Nvidia is likely to
surpass its imminent earnings projection, the stock’s price movement might hinge on the extent of the beat. In
the Q2 of the prior year, the company delivered an earnings
surprise of 31.6%. Subsequently, this metric has steadily dwindled to 9.8% in fiscal Q1 2025.
The Exchange-Traded Funds:
Amid the looming uncertainties shaping the NVDA narrative, an array of opportunities beckons through Direxion’s
Nvidia-focused ETFs. On one hand, adherents of the tech behemoth may find interest in the Direxion Daily
NVDA Bull 2X Shares NVDU. This leveraged ETF aims to amplify NVDA’s daily returns by 200%.
Conversely, those eyeing a contrarian stance can explore the Direxion Daily NVDA Bear 1X Shares
NVDD, offering a convenient vehicle to bet against the semiconductor giant
as it marches forward. NVDD mirrors 100% of the inverse performance of NVDA.
Principally, Direxion provides a user-friendly platform for retail traders to incorporate leverage or short
positions without delving into the complexities (and risks) of options trading. However, investors are cautioned to
exercise prudence with leveraged and inverse ETFs – these instruments are best suited for short-term holdings.
Prolonged ownership may incur value erosion.
The NVDU ETF:
As envisioned, NVDU closely shadowed NVDA stock performance but with a significantly accentuated effect. Since the
year’s commencement, the 2X fund surged by nearly 298%. Concurrently, NVDA recorded a 162.5% upturn.
- NVDU exhibited robust support in the vicinity of the $70 level. However, its trajectory from June 18 onward
portrayed a succession of escalating lows. - Bulls’ aspirations lie in breaching the consolidation pattern at $109 and aiming for the psychologically
pivotal $120 threshold. - Trading volume has exhibited a steady upswing since late last December, indicating mounting interest.
The NVDD ETF:
Counterintuitively, the NVDD ETF faced a lackluster year, shedding over 68% in market value since the year
inauguration. Attempts to cling to crucial support levels faltered as NVDA stock advanced northward.
- NVDD languishes below both its 50-day moving average ($7.97) and the 200 DMA ($13.52). With Monday’s
closing price at $7.28, it stands below a pivotal support line at $7.50. - Bears’ primary objectives are to validate support at $7.50 and breach the $8 milestone, potentially catalyzed
by a less-than-stellar Q2 earnings outcome. - Notably, acquisition volume for the bearish fund has held strong, suggestive of growing interest in the
contrarian narrative, as the bullish contingent may be overly crowded.