Nvidia investors are seeking protection ahead of the company’s upcoming earnings report and an AI conference. The stock suffered its largest weekly drop since 2022 after news of cheaper artificial intelligence models developed by Chinese startup DeepSeek sent shockwaves through the market. Concerns that these new models could lead to reduced hardware spending caused Nvidia shares to plummet, triggering a broader selloff in US stocks. Despite calming down, traders are now buying up Nvidia options, both calls and puts, which has driven implied volatility sharply higher. The recent imposition of tariffs by US President Donald Trump on key trading partners has also added fuel to the fire, causing Cboe Volatility Index futures to jump in overnight trading.
Source: https://www.bloomberg.com/news/articles/2025-02-03/nvidia-investors-seek-cover-after-years-of-yolo-rally-chasing