JPMorgan recommends bullish options bet on Nvidia ahead of earnings

Nvidia, the most valuable stock in the world, has lagged its semiconductor peers over the past three months in the run-up to its fiscal 2026 third-quarter results, due out after Wednesday’s close.

JPMorgan reckons an earnings beat, as well as signs that the company and its suppliers are well positioned to meet the ever-growing demand for its AI offerings, would be sufficient catalysts to unlock a catch-up trade that sends shares soaring back toward all-time highs.

“We favor owning call spreads as a strong beat-and-raise from NVDA and positive commentary around supply could clear recent sector underperformance and could propel NVDA above its average historical move,” wrote Bram Kaplan, head of America equity derivatives strategy at JPM.

The recommendation:

• Buy calls at a strike price of $197.50 for this Friday’s expiry; and

• Sell the same amount of calls at a strike price of $207.50 for the same expiry.

The options-implied move is plus or minus ~6.4%. To break even on this position (by the time of expiry, based on current prices), you’d need to see shares up above $199.30.

The chip designer has traded between ~$180 and $210 since the end of September. So, the upper strike on this call spread caps the upside a little below the stock’s October 29 intraday peak of $212.19.

The max gain would be roughly 550% of the premium paid; the max loss, of course, would be 100%.