NVIDIA's Stock Fluctuations After Earnings: How to Use ETFs for Short-Term Opportunities

After NVIDIA released its Q3 results, the stock had a wild ride. It dropped over 5% at first but then bounced back, ending 2% down in after-hours trading.

Let's break down what happened and why the market seems worried. For investors with higher risk tolerance looking to capture NVIDIA's short-term price movements, we'll also explore how to use ETFs for these opportunities.

Key points to understand market concerns:

1. Revenue growth is slowing: NVIDIA's FY25 Q3 revenue grew 94% year-over-year and 17% quarter-over-quarter. While still exceeding expectations, it's less dramatic compared to previous quarters' YoY growth rates of 265%, 262%, and 112%.

2. The guidance didn't significantly beat expectations: Q4 revenue guidance of $37.5 billion surpassed the average estimate of $37.1 billion but fell short of some analysts' projections ranging from $38.8-41.0 billion. This might be due to slower-than-expected progress on the Blackwell chip. However, NVIDIA's CFO mentioned the successful replacement of a Blackwell component, with shipments planned for Q4 and increased production in fiscal 2026.

The market was particularly focused on Blackwell's delivery status. Despite management's positive signals, the moderate guidance has caused some market concern.

Investors should closely monitor Blackwell's delivery progress, as it could directly impact NVIDIA's stock price.

For those interested in NVIDIA's performance beyond direct stock ownership, ETFs that track the company's stock offer an alternative approach.

The U.S. Stock market has introduced a variety of leveraged and inverse ETFs that follow individual stocks. These financial instruments may appeal to investors who are comfortable with short-term trading and have a higher risk tolerance.

Leveraged or inverse single-stock ETFs are designed for short-term investment strategies. While they may be more straightforward to grasp than options, they typically offer lower leverage and potential returns. However, they can also provide a more measured approach to risk management and may be more accessible for trading purposes.

Some ETFs that follow NVIDIA's performance include:

– For positive outlooks: NVDL, NVDU, and NVDX

– For cautious perspectives: NVD, NVDQ, and NVDS

These ETFs aim to mirror NVIDIA's stock movements, often with amplified effects. For instance, a 2% increase in NVIDIA's stock might result in approximately a 4% rise for NVDL (2x long), while NVD (2x short) might see a 4% decrease. It's important to note that tracking may not always be precise.

Here, we'll use moomoo's price overlay feature to demonstrate the comparative price movements of NVIDIA's stock, NVDL, and NVD from yesterday. As you can see, at yesterday's close, NVIDIA's stock price fell 0.76%, NVDL correspondingly dropped 1.61%, while the 2x bearish NVD rose 1.61%.

Investors might consider these ETFs for:

1. Potentially enhancing returns based on market outlook: Those optimistic about Blackwell's production and NVIDIA's performance might look into a 2x leveraged ETF, while those with concerns about delivery timelines might consider a 2x inverse ETF.

2. Managing short-term volatility for long-term investments: A 2x inverse ETF could be used to help balance against anticipated short-term fluctuations following earnings reports.

Investor Consideration: It's crucial to understand that leveraged ETFs can experience more significant price movements compared to the underlying stock. Incorrect market predictions could potentially lead to increased losses. Additionally, management fees and the effects of leverage over time may impact the ETF's ability to accurately track the stock. We encourage investors to carefully evaluate their risk tolerance and choose strategies that align with their individual financial goals and circumstances.