Will Nvidia skyrocket 20% in revenue?

Nvidia (NASDAQ: NVDA) is scheduled to announce its revenue on February 26, 2025 after the market closes. The semiconductor leader currently holds a market capitalization of $3.3 trillion. For the past 12 months, NVIDIA has reported revenue of $113 billion, operating income of $71 billion and net income of $63 billion. The response of stocks after earnings depends heavily on how the outcome and future prospects match investor expectations. Analysis of historical performance is beneficial for event-driven traders. By understanding past trends and positioning yourself before the revenue release, or by examining the correlation between immediate revenue and medium-term returns for conducting informed transactions the day after the announcement. Specifically, historical data suggests that up to one day of revenue movement was just over 20%. Complete analysis below.

Nvidia’s aggressive historical probabilities after revenue

One day (1D) observations after earnings include:

Over the past five years, there are 20 revenue reports, with 11 positive and 9 negative one-day returns, indicating that 1D returns around 55% of the time.
Considering data from the past three years, this percentage has increased to 58%.
The median positive returns of 11 are 4.9%, and the median negative returns of 9 are -5.9%.

Additional data on observed returns are summarized in tables 5 days (5D) and 30 days (30D) after revenue.

Correlations between historical returns for 1D, 5D, and 30D

Potentially low-risk strategies (although their effectiveness depends on the strength of the correlation) include understanding the relationship between short-term and medium-term returns after revenue. Identifying the highest correlation and pair can guide trading decisions. For example, if 1D and 5D returns show the best correlation, then the trader may consider the “long” position for the next 5 days if the return after 1D revenue is positive. Below is correlation data based on 5 and 3 years (more recent) history. “1D_5D” refers to the correlation between the 1D return after earnings and the subsequent 5D return.

Is there a correlation with peer revenue?

Sometimes, peer companies’ performance can affect the response of stocks after earnings, and market adjustments may begin before the revenue announcement. The table below shows historical data comparing Nvidia’s post-revenue performance with the performance of peers who reported revenue just before Nvidia. For a fair comparison, peer stock returns represent one day (1D) returns after revenue.

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