Is Nvidia dead money, or a coiled spring?
The stock has done next to nothing for five months. Stellar Q3 results and guidance failed to inspire a rally.
Nvidia, the prime facilitator of the AI boom, reports quarterly results today after the close.
It would be a monumental disappointment if the company reported any negative surprises in the highest-profile numbers. Nvidia has reported better-than-expected adjusted earnings per share for 12 consecutive quarters; on the top line, that streak runs for a baker’s dozen.
“Having said how strong the business is likely to be, we would note that sentiment is positive and expectations are pretty high,” Morgan Stanley analyst Joseph Moore said.
However, if you had nothing but a five-month chart of Nvidia’s share price, you wouldn’t think expectations were too high. You’d think this is a company that’s struggling to convince investors that it’s on the right track.
The beats will continue, but will morale improve?
“We are clearly in an environment of elevated expectations heading into NVDA’s F4Q26 (Jan-Qtr) print, considering the stock has basically moved sideways since the F3Q26 print despite a slew of positive/favorable developments (including announcements of sharply higher hyperscaler capex budgets for calendar year 26 and NVDA’s recently announced partnership with META for large-scale Blackwell/Rubin GPU/CPU/networking deployments),” agreed JPMorgan analyst Harlan Sur.
Sur hits on an important item: the lack of a positive reaction to good news.
That was the story that defined Nvidia’s previous earnings report. On November 19, the company’s results bested expectations, as did its guidance for Q4 revenues and adjusted gross margin. Management tried to give all the right answers on their conference call.
None of it worked. The initial knee-jerk jump in the stock faded, and shares ended the next day sharply lower. It’s not like the stock had been on fire, either: it was down 8% month to date in November ahead of reporting, trailing the S&P 500’s 2.6% slump over the same stretch.
After those results, CEO Jensen Huang claimed that “the whole world would’ve fallen apart” if Nvidia had a bad quarter. The common misconception of Atlas is that he was forced to carry the weight of the world on his shoulders. No doubt, Huang feels like Nvidia is bearing an enormous load. But in fact, the titan was charged with keeping the heavens separated from the earth. Ironically, Huang faces the opposite challenge: designing the chips that will bring digital God to the masses. Presumably, something powerful enough so that investors will stop worrying about his biggest customers’ return on investment.
The failure of positive catalysts to deliver the expected outcome is something that can cause alarm bells to go off for traders, suggesting that the bullish thesis was already well understood and well subscribed.
Three months ago, the predetermined narrative seemed to be that Google, fresh off Gemini 3’s glowing reviews, was becoming a singular AI winner, with a halo effect for many of its supply chain partners, while anything affiliated with OpenAI got crushed.
That makes whether good news can simply be good news this time around the key question to watch for in this earnings report, or if the market’s seemingly narrower focus on AI hardware beneficiaries remains a dominant trend.
The stock has caught a bid ahead of earnings, but came into this week up less than 2% from where it was at the end of Q3. After trading sideways for about five months, is this “dead money” — that is, a stock that’s going nowhere — or, as Macro Risk Advisors CEO Dean Curnutt wrote, a “coiled spring”?
“Over the last three months, Nvidia has traded in a remarkably tight +/- 13.5% range, and that period includes the sharp 10% drawdown and full recovery in early February,” he wrote. “For a name that has historically seen much wider 20% to 40% one-month rolling ranges, this is extraordinary.”
Curnutt flagged a call and put spread trade apiece that expire on March 20 to benefit from potential range expansion (in either direction) following this report. However, he added, “Admittedly, I think Nvidia upside is a more attractive opportunity for most managers.”
