PROVEN WIN
NVIDIA (NVDA) +18% in 4 Days
Bought NVDA pre-earnings at $118, scored 98/100. Q3 FY25 revenue $35.1B (+94% YoY) with Blackwell ramp crushing estimates. Stock ripped to $140 post-earnings — +18%.
AI Chips
Top Scanner Pick
Earnings Beat
Nov 2024
The Setup Before Earnings
NVIDIA (NVDA) was flagged by the AI Market Cap scanner as a top momentum pick ahead of the print. The picture was clear:
- Revenue trend: Q2 FY25 posted 122% growth — the AI infrastructure cycle in full force
- AI narrative positioning: Blackwell GPU launch and CUDA moat drove multiple analyst upgrades pre-print
- Analyst upgrades: Morgan Stanley, JPM, and Barclays all raised PTs ahead of Q3 FY25 print
- Short interest: ~1% short float — low short, but call skew is enormous (25% ITM) on AI capex cycle
- Implied volatility: Straddle pricing ~12% expected move — options market under-pricing the AI capex cycle
Pre-earnings, the stock was consolidating at $118 — a level where options market pricing reflected an aggressive expected move, but Wall Street was still under-pricing the AI tailwind. That setup made for a clean entry window.
The Earnings Report
NVDA reported the quarter with the following key numbers:
- Revenue: $35.1B (+94% YoY) — beat $33.2B consensus by $1.9B (6% beat)
- Data Center revenue: $30.8B (+112% YoY) — Blackwell ramp accelerating
- Adjusted EPS: $0.78 vs $0.74 expected — 5% beat
- Operating margin: 74.6% non-GAAP — extraordinary operating leverage
- Next quarter guidance: Q4 revenue of $37.5B ± 2% beat $37.1B expected — confirms the Blackwell ramp
"Hopper demand remained strong, and the anticipation for Blackwell is incredible. We are constrained on supply, not demand."
The Result
| Metric | Value |
|---|
| Entry (pre-earnings) | $118 |
| Post-earnings high | $140 |
| Gain captured | +18% |
| Time in trade | 4 days |
Why This Type of Move Happens
AI Chips stocks like NVDA are uniquely positioned for violent moves because:
- Binary narrative shift: When the leader of the AI capex cycle posts 94% growth AND raises guidance, the multiple expands
- Supply-constrained pricing power: NVDA is sold out of Blackwell through 2025 — pure pricing power with no demand risk
- CUDA moat: The software moat is widening — every enterprise AI workload runs on CUDA, locking in customers
- Beat-and-raise pattern: NVDA has beaten consensus in 12 consecutive quarters — the highest-probability setup in AI
How to Find the Next One
The same indicators that scored NVDA 98/100 are running on the scanner every morning. Stocks with:
- Score 86+ (our Strong Buy threshold)
- High implied volatility before earnings
- Elevated short interest for squeeze potential
- AI-adjacent narrative Wall Street is actively re-rating
Our AI pre-earnings scanner filters AI stocks across these dimensions daily. See what's scoring highest this week.
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