(Bloomberg) -- Worries about the growth outlook for Nvidia Corp., the chipmaker at the center of the AI spending boom, pushed shares to a three-week low on Thursday. And someone just wagered that a deeper slide is in store.
Between 2 p.m. and 2:40 p.m., a trader bought more than 300,000 contracts wagering that Nvidia’s shares would drop to $115 by March 7 — a move that implies a 12% decline from Wednesday’s close. The last time shares traded at this level was in mid-September.
It was the most-active options contract on US exchanges Thursday.
The bearish trade came a day after the chipmaker delivered good-but-not-great quarterly numbers, disappointing investors accustomed to blowout results. The bearish wager most likely exacerbated Thursday’s weakness in the stock, resulting in the worst session in a month.
The stock dropped about 3% since the buying of the contract began in the afternoon, and implied volatility on the option rose by 8 points, according to Chris Murphy, co-head of derivatives strategy at Susquehanna International Group.
“This put buyer captures the State of the Union and NFP for next week,” said Murphy, referring to monthly jobs data due next week and a scheduled speech by President Donald Trump.
The bearish wager pushed Nvidia’s put volume to more than two times its average reading in the past 20 days, data compiled by Bloomberg show. Blocks of as much as 2,900 contracts changed hands.
A further wave of trading was seen in the last 30 minutes of the session, adding another 100,000 lots to the overall volume. To Murphy, that could indicate profit-taking by the same investor who bought puts earlier in the day.
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