Nvidia earnings on tap: Simple portfolio strategies for all investors

Key points

• Nvidia’s earnings are a macro event: It impacts not just one stock, but the momentum of the AI trade, market indices, and global investor confidence.
• Exposure runs deeper than direct holdings: Nvidia now makes up roughly 8% of the S&P 500, and even more in tech-heavy indices, meaning broad portfolios feel its swings.
• Simple strategies can turn volatility into advantage: Long-term investors can hedge by diversifying or trimming positions; tactical allocators can lean on baskets or sector rotation; while traders can engage with options-driven volatility plays.

Nvidia reports earnings on Wednesday, August 27 after U.S. markets close (Thursday morning in Asia).

Nvidia is more than just a chipmaker; it has become the center of gravity in the AI trade. Its graphics processors are the backbone of generative AI applications, cloud infrastructure, and next-generation computing. That makes its results a real-time gauge of whether the AI investment boom is still accelerating or starting to cool.

Nvidia earnings are no longer just a stock story. With its outsized role in AI and major index weightings, its results can sway the S&P 500, Nasdaq 100, and investor confidence worldwide.

What to watch in the results

• Data center growth – The AI engine that powers Nvidia, accounting for nearly 90% of its sales. Investors will want to see if demand from cloud giants like Microsoft, Google, and Amazon is still accelerating.
• Blackwell chip rollout – Nvidia’s next-generation chip is expected to extend its leadership in AI. Timelines for shipments and pricing power will be closely watched.
• Margins – Nvidia has enjoyed industry-leading profit margins. Any signs of cost pressures or discounting would be a red flag.
• China exposure – Export restrictions and licensing could limit sales. The market is looking for clarity on how much risk sits here.

How you may be exposed

Even if you don’t hold Nvidia shares directly, you may still be exposed:

• Through index funds: Nvidia makes up ~8% of the S&P 500 and is its single-largest component. That means a big move in Nvidia can move the entire index, impacting broad-market ETFs.
• Through tech funds or semiconductors ETFs: Many thematic and sector funds (semiconductors, AI, technology) have Nvidia as their largest holding, so sector moves echo through the AI value chain.
• Through related companies: If Nvidia guides strongly, suppliers (chip equipment, memory makers) could rise. If they disappoint, ripple effects could hit the entire AI value chain.

Hedging strategies

For long-term investors (buy & hold)

Goal: Protect downside, preserve long-term upside.

• Diversify with ETFs: Balance Nvidia exposure with other AI and semiconductor companies through ETFs (like VanEck Semiconductor ETF or iShares Global Semiconductors ETF). This avoids “all eggs in one basket.”
• Trim position size: If Nvidia has grown into too big a portion of your portfolio, consider reducing it slightly before earnings.
• Use broader exposure: Owning index funds or diversified AI/tech baskets spreads out company-specific risk.
• Protective put: If you prefer not to reduce holdings, one option is to buy short-term insurance in the form of a put option. This works like a safety net, though it comes at a cost.
• Covered calls (Post-Earnings): If you already hold own 100+ shares, selling an out-of-the-money call can generate income in high-volatility environments, while capping some upside.
• Cash-secured puts (for those looking to buy): For those looking to buy Nvidia on a dip, selling a put at your desired entry price lets you collect premium now. If the stock drops below that level, you buy the shares at a lower cost basis.

For tactical investors (active allocators)

Goal: Stay nimble, reduce capital at risk.

• Stock replacement: Instead of holding full Nvidia shares through earnings, consider shifting part of your position into a call spread (buy one call, sell a higher strike call) to reduce capital at risk while maintaining upside potential.
• Basket approach: Balance Nvidia with lagging peers or suppliers to benefit from relative performance shifts. If Nvidia surprises, dispersion creates winners and losers.
• Trim & rotate: If Nvidia rallies post-earnings, consider rotating partial profits into broader AI beneficiaries — networking, cloud, or diversified tech ETFs.

For traders (event-driven & options-savvy)

Goal: Trade the volatility, not just the direction.

• Straddles/strangles: Buy both a call and a put to profit if Nvidia’s move is larger than the ~6% expected. Risk: expensive premium needs a big move.
• Calendar spreads: Sell high-priced near-term options and buy longer-dated ones, betting that volatility will collapse after earnings.
• Post-earnings premium selling: If the move is smaller than implied, traders can sell options after results when volatility collapses.

Bottom line

Nvidia’s earnings have become the AI market’s quarterly stress test. Whether you’re a passive investor or an active trader, hedging ahead of the print can help turn uncertainty into a strategy rather than a stress point.

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