Active traders looking for targets this week don’t have to look far. That’s because a familiar name reports earnings on Wednesday after the close of U.S. markets. The stock is semiconductor giant Nvidia (NVDA), the largest company by market value. Particularly against the backdrop of headlines indicating multiple well-known investors have exited Nvidia positions, the company’s Wednesday earnings update is seen not only as a test of investors’ devotion to AI, but a test of broader market sentiment as well. That could indicate a perfect storm is brewing for short-term traders to consider ETFs such as the Direxion Daily NVDA Bear 1X Shares (NVDD) and its geared bullish counterpart, the Direxion Daily NVDA Bull 2X Shares (NVDU).
Nvidia ETFs in the Limelight
Earnings reports are the ideal events through which aggressive traders can deploy ETFs like NVDU and NVDD. And that could be true again this week.
Traders evaluating the Direxion ETFs should note Wall Street expects Nvidia to deliver $1.25 in EPS on $54.9 billion of sales for Q3. That revenue increase represents a 56% YoY jump. Nvidia typically doesn’t provide more than a quarter’s worth of forward-looking forecasts.
“Nvidia doesn’t provide more than one quarter of forward-looking guidance at earnings. But anything Huang says about the company’s sales backlog and outlook for calendar 2026 will be scrutinized not just for Nvidia’s outlook but also that of the broader tech industry. Analysts polled by LSEG currently expect $286.7 billion in sales for Nvidia in 2026,” reported Kif Leswing for CNBC.
Said another way, disappointment could easily juice the bearish NVDD for a day or two. And Nvidia earnings ebullience could send the bullish NVDU soaring.
What is clear is that Nvidia isn’t a cheap stock. Some analysts believe it’s richly valued. That indicates there’s essentially no margin for earnings error. It also indicates there’s some burden on the company to beat Wall Street estimates while guiding higher for the upcoming quarter.
“With its 3-star rating, we believe Nvidia’s stock is fairly valued compared with our long-term fair value estimate of $225 per share, which implies an equity value of $5.1 trillion. Our fair value estimate implies a fiscal 2026 (ending January 2026 or effectively calendar 2025) price/adjusted earnings multiple of 50 times and a fiscal 2027 forward price/adjusted earnings multiple of 30 times,” noted Morningstar analyst Brian Colello.
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Editor’s Note: This piece was written before Nvidia reported results.
