There's More Than One Way to Bet on Nvidia's Earnings Report.

Key Takeaways

• Traders are betting on which words will be uttered during Nvidia’s upcoming earnings call, at what price the company’s stock will be by the market’s close, and of course, whether they will beat analysts’ quarterly earnings-per-share estimates.
• The perceived probability that the word “humanoid” would be uttered during the call recently surpassed the likelihood of “tariff.”

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Some traders stand to win (or lose) big after Nvidia reports tomorrow, even if they don’t own a single share—or, for that matter, if they don’t own any stocks at all.

Prediction markets have created finer slices of bets around high-profile company earnings, enabling folks to profit on a range of outcomes in addition to the direction of stock prices. A trader homing in on Nvidia (NVDA) could, for example, put money on a bet that asks “Will Nvidia beat quarterly earnings?” and walk away with winnings even if the outcome doesn’t move its shares at all.

There are also funkier bets.

WHY THIS MATTERS TO YOU

Prediction markets have become serious business, with players like Polymarket and Kalshi, but also Robinhood, Coinbase, CME Global, and DraftKings. Most recently, investment shops have proposed putting event contracts into ETFs.

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One of them: “What will Nvidia say during their next earnings call?” As of Tuesday morning, bettors have put a higher probability, or 59%, on the chance the word “humanoid” will be uttered than on “tariff” or “Taiwan,” on which the odds are 54% and 49% respectively. These types of event contracts would appear to appeal to retail traders, with lower relative buy-ins, shorter time horizons to make a profit, and the idea that, with research, they can make educated bets.

Prediction market bettors can buy a single contract for pennies, and if they resolve in their favor, win $1. If someone were to buy 100 shares of a contract on the premise that someone on Nvidia’s conference call— CEO Jensen Huang, say, or some other company representative—says “humanoid,” and it happens, they would need to bet $59 to make a $41 net profit.

The lower the odds, the higher the payoff. If someone says “VR” or “virtual reality,” which the market recently put a 16% probability on, a bettor could buy 100 shares of that contract for $16 and walk away with $84.

Related Education

Prediction Markets Explained: Types, Uses, and Real-World Examples

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To the casual observer, these outcomes may seem random, and the event contracts on them a wild guess. Some bettors, however, have gotten creative in search of an edge.

An enterprising 21-year-old who placed a bet on the length of Charlie Puth’s singing of the national anthem at Super Bowl LX sat in the stadium parking lot with a stopwatch and a recording device to time rehearsals.

That bettors are placing a high probability on the word “humanoid” being uttered in Nvidia’s earnings call could have to do with the instances it has been said in the past in other contexts. An Investopedia scan of the term using transcripts provided by AlphaSense shows that company execs said it at least couple of times in reference to robotics during company presentations at conferences from late October to early February.

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