Nvidia reports fourth-quarter fiscal 2026 earnings on Wednesday, February 25th, after the bell. The stock is the single most-watched event on every trader’s calendar this week. But if you’re thinking about buying the earnings straddle, the data says you should think again.
The at-the-money options straddle expiring February 27 — the market’s best real-time gauge of how much it expects Nvidia to move — is priced at roughly 7%. That sounds reasonable for the world’s largest company by market cap ($4.44 trillion). But over the last 10 earnings reports, the median post-earnings stock move has been just 3.2%. The three most recent moves? Down 3.15%, down 0.78%, and up 3.24%. Not exactly the fireworks the options market is charging for.
That’s a gap you can drive a truck through. When implied volatility overprices actual realized moves by this much, buying straddles is like paying $7 for a $3 lottery ticket. The house wins most of the time.
The expectations are staggering. Wall Street is looking for earnings per share of $1.51 on $65 billion in revenue — representing over 70% year-over-year growth. Last quarter, Nvidia posted a record $57 billion in revenue, with $51.2 billion coming from data centers alone. CEO Jensen Huang declared Blackwell sales were “off the charts” and cloud GPUs were “sold out.” The AI ecosystem, in his words, is “scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries.”
And yet — the stock has done essentially nothing in 2026. It opened the year at $189 and trades around $188 today, stuck in a $20 range for nearly two months. The implied volatility for earnings week — at 6.5% — actually sits on the low end of the typical 5-10% range we see for Nvidia reports. Translation: the market expects them to beat, expects big numbers, and has already priced in a “good” outcome. The real risk isn’t in the revenue or EPS figures. It’s in the forward guidance narrative.
Specifically, traders will be laser-focused on Blackwell demand sustainability, the data center revenue trajectory for the second half of 2026, and any color on how the tariff and geopolitical backdrop affects supply chains. If Nvidia delivers the expected beat but offers conservative guidance, the stock could easily slide 3-5% on a “sell the news” reaction — and options buyers at 7% implied would still lose money.
For traders who want skin in the game, the smarter approach is selling premium, not buying it. Put sellers can collect elevated premiums on strikes 8-10% below current prices, getting paid to buy a stock you’d want to own anyway at a significant discount. Or consider a put credit spread if you want defined risk. The March expiration cycle shows a +-$18.45 implied move, meaning the earnings volatility accounts for over half of the next month’s expected range — once that event passes, implied volatility should collapse, benefiting anyone who sold options ahead of the report.
Nvidia is still the most important company in AI. Nobody’s questioning that. But the options market is pricing in a blockbuster movie when history says we’re more likely to get a solid drama. Trade accordingly.