H20 exports to China remain under-estimated — a risk to NVDA’s results

Return to the Mean

NVDA has effectively been trading in a volatile range since last summer. There’s no new trend — just oscillations. The upper boundary of the range sits at $140. A close above that level opens the path toward resistance at $150. Supports are found at $130, followed by the $120 zone.

Entering NVDA

1. “For nearly 12 months, NVDA has been moving sideways. The range is wide — and volatile — with at least six distinct 25%+ swings lasting 2–3 weeks just this year. Still, price remains within range. Dealing desk data shows more balanced two-way flow in recent weeks and quarters, and we’ve seen multiple earnings seasons without major thematic inflows into NVDA.
2. NVDA is up over 50% from the April 7 low and is now technically overbought — creating a potentially tricky backdrop ahead of earnings. However, institutional sentiment and positioning appear more moderate, which partly offsets the overstretched technicals. On a scale from 1 to 10 in terms of positioning, NVDA is at 7.5.”
   <br>— (Goldman Sachs, Pete Bartlett)

Concerns / Risks

JPMorgan’s Meyers on NVDA ahead of earnings:

“The de facto export ban on the H20 chip from April 9 is expected to remove around $15–16 billion from fiscal year profit (~$7.6 billion revenue hit expected in July and October, assuming AMD as a benchmark).
Yet, few analysts have updated their forecasts to reflect any downside from H20. Many market participants haven’t either.
I highlight this as a material risk, which could make this earnings season particularly turbulent.”

Sellers Are Showing Up

Before becoming too bullish on NVDA after a 50% rally off the lows:

“Flows from both retail and institutional investors into NVDA are now sharply declining. Historically, when both sentiment and flows turn negative, NVDA tends to drop 15–20%.”
— (JPMorgan, Manish Sinha)
The implied move into earnings is around 6%.

Time for “Noise” Around NVDA

“…During this lull in the tech sector, it’s worth remembering just how pivotal tech is to broader market risk sentiment. It’s hard to believe this silence will last much longer.”

Option Market Color

Options volatility on NVDA appears quite subdued ahead of earnings, with the market pricing a move around 6%. SpotGamma adds context:

“…Put skew is fairly flat — and honestly, call skew is even flatter.
Looking at EquityHub, traders are short downside puts ≤130 and upside calls ≥140 — suggesting positioning for a ‘pin’ scenario.
One-month implied volatility indicates a market lacking directionality.”