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LivestreamMenuNvidia earnings have become a market event that can ripple beyond the chipmaker itself. Ahead of Nvidia’s latest quarterly report on Wednesday after the bell, CNBC Pro screened for stocks that have historically traded most closely with Nvidia on the trading day following its earnings release — and another group that has tended to move in the opposite direction. Nvidia reports fiscal second-quarter earnings Wednesday after the bell. Wall Street is looking for adjusted earnings per share of $2.10 on $92.18 billion in revenue, both nearly double their levels from last year, LSEG data shows. The options market is pricing in a roughly 5% move following the release in either direction, based on near-term contracts. Our analysis of Nvidia lateral trades looked at earnings-reaction days going back to 2016 and measured three things: A stock’s correlation to Nvidia, its beta and the percentage of reaction days in which the stock moved in the same direction as Nvidia. For the “sympathy” basket, the screen required at least 30 observations, a correlation of at least 0.45, a beta of at least 0.1 and a market cap above $2 billion. The results are naturally dominated by semiconductors and companies tied to the broader AI infrastructure buildout. Advanced Micro Devices showed the strongest relationship in the screen with a 0.75 correlation to Nvidia and a beta of 0.28. AMD also moved in the same direction as Nvidia on nearly 70% of earnings-reaction days in our analysis. Vertiv , which makes power and cooling equipment used in data centers, also ranked highly, with a 0.67 correlation and a 0.27 beta. The company has a shorter trading history than many in the screen, with 32 observations. Several deeper-cut semiconductor firms also made the list. Onto Innovation had a 0.64 correlation, followed by Marvell at 0.59 and Monolithic Power at 0.57. Marvell moved in the same direction as Nvidia 71% of the time, the highest rate among the larger names near the top. Micron , Broadcom , Synopsys and Cadence Design also appeared on the sympathy list, reinforcing how Nvidia has become a read-through for companies across the chip space. CNBC Pro also looked for stocks that have historically moved in opposition. The “anti-Nvidia” basket required at least 30 observations again, along with a $2 billion minimum market cap, a correlation of negative 0.45 or lower and a negative beta. Unlike the sympathy basket, the inverse group is concentrated in defensive names and non-technology sectors. Pfizer had a negative 0.61 correlation to Nvidia and moved in the same direction as the chipmaker just 38% of the time in the reaction days studied. McDonald’s showed an even stronger divergence, with a negative 0.56 correlation and same-direction rate of just 17%. Verizon , Philip Morris , Amgen and Johnson & Johnson also ranked among the stocks that have tended to move opposite Nvidia. Gold-related stocks also showed up in the inverse basket: Newmont for example had a negative 0.54 correlation and moved in the same direction as Nvidia in just 29% of the observations. The inverse relationship of course doesn’t necessarily mean that Nvidia earnings directly drive shares of the companies. Instead, they may reflect broader market rotation, with strong Nvidia reactions coinciding with enthusiasm for growth and AI-related stocks while defensive, value-oriented names tend to fare better when that risk-on trade weakens.Read More
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