Mark your calendar: February 26 might be the most important single day for the stock market this quarter. That’s when Nvidia’s earnings hit the tape — and given how deeply woven this one stock is into every major index, the ripple effects could be massive.
Nvidia reports after the close on February 25, which means February 26 is reaction day. And the numbers behind the reaction are staggering. Nvidia now makes up roughly 7.1% of the S&P 500, over 13% of the Nasdaq Composite, and 2.3% of the Dow Jones Industrial Average. When this stock moves, the market moves. Period.
But here’s what’s interesting: the options market is pricing in a 7% post-earnings move on NVDA. That sounds dramatic, but historically, Nvidia’s median post-earnings move over the past 10 reports has been just 3.2%. The three most recent moves? Down 3.15%, down 0.78%, and up 3.24%. In other words, options traders are paying a hefty premium for volatility that may not materialize at the level they expect. That’s a signal that the straddle is overpriced — and for savvy traders, there may be a smarter play than just buying calls or puts outright.
The fundamental setup heading into earnings is actually quite bullish. Nvidia trades at 23.6 times forward earnings — cheaper than the Nasdaq 100 average of 25.3x. For a company Wall Street expects to grow revenues 57% this fiscal year and accelerate to 65% growth in FY2027, that’s a surprisingly modest premium. Catalysts include surging AI capex, the new Blackwell chip architecture ramping up, and a potential return of GPU sales to China.
And it’s not just Nvidia in a vacuum. A strong report would likely drag up the entire AI ecosystem — Broadcom, AMD, Taiwan Semiconductor — which collectively represent a massive chunk of the market. When all those names move together, you get a broad-based rally that lifts indexes well beyond what one stock’s weighting would suggest.
The flip side is real, too. If Nvidia disappoints — or even just meets expectations without raising guidance — the selling pressure could cascade through the same chain in reverse. With the S&P 500 already trading at 21.5 times forward earnings (above its 5-year average), there’s not a lot of margin for error. Either way, February 26 is shaping up to be a day traders and investors should be watching very closely.