Nvidia closed out the so-called Mag 7 reporting season with another quarter of rapid expansion, driven by continued demand for its AI-focused hardware. The company delivered adjusted EPS of $1.87, more than doubling from a year earlier, while revenue climbed 85% year-on-year to a record $81.6bn.
Data Center remained the main engine: sales reached $75.2bn, also a record, and rose 92% from the prior-year period, supported by ongoing appetite for GPUs. The update also referenced positive revisions to EPS expectations for the current and next fiscal year, and the stock carries a Zacks Rank of #2 (Buy).
Record-Breaking Data Center Growth Drives Outlook
With these record-breaking results now behind us, we see a clear path forward for the stock. The sustained 92% growth in the Data Center segment confirms the AI infrastructure buildout is not slowing down. This fundamental strength should provide a tailwind for the stock price over the next several weeks.
We’ve seen implied volatility on NVIDIA options drop significantly since the earnings release, settling from pre-announcement highs of over 75% to a more stable 48% now. This post-earnings volatility crush makes buying options, rather than selling them, a more attractive strategy for capturing upward movement. Cheaper premiums allow for better leverage on our bullish outlook.
Market Sentiment and Options Strategies
The broader market supports this view, with the Nasdaq 100 up 3.5% this month and overall tech spending forecasts remaining robust. Recent data shows enterprise AI investment commitments for the second half of 2026 are already 15% higher than last year. This macro environment confirms that the demand drivers for NVIDIA’s products are secure.
Therefore, we are looking at buying call spreads expiring in late June and July 2026 to capitalize on this expected momentum with a defined risk profile. Another approach we favor is selling out-of-the-money puts to collect premium, taking advantage of the still-elevated volatility compared to the broader market. We must watch for any changes in capital expenditure plans from major cloud providers as a key indicator.
