Nvidia's Upcoming Q3 Earnings Report Draws Intense Interest In Direxion's NVDU, NVDD ETFs

Easily one of the main faces of artificial intelligence, Nvidia Corp (NASDAQ:NVDA) is once again stealing the limelight. Next week, the semiconductor juggernaut is set to release its third-quarter earnings report. It’s also a significant time for stakeholders as NVDA stock is currently trading just below the psychological $200 threshold. Still, with the underlying company commanding a gargantuan market capitalization of $4.69 trillion, questions have emerged about forward viability.

Looking at the anticipated print, Wall Street analysts believe that Nvidia will post adjusted earnings per share of $1.22 on revenue of $54.74 billion. In the year-ago quarter, the tech giant reported EPS of 81 cents on sales of $35.08 billion, with both figures handily beating expectations. Still, one of the concerns will likely center on sustained excellence. Following a long string of consensus-busting performances, a slip-up wouldn’t entirely be unexpected.

Furthermore, with Nvidia consistently delivering the goods, a risk exists that investors are beginning to take these robust performances for granted. It’s worth pointing out that while NVDA stock has gained nearly 44% on a year-to-date basis, the rally hasn’t been smooth. For example, in the first few months of 2025, NVDA suffered an erosion of value. In late summer to late October, the security incurred sideways trading.

Still, Nvidia fundamentally benefits from rising interest in generative AI. Consulting firm McKinsey estimates that machine intelligence can deliver $2.6 trillion to $4.4 trillion in economic benefits each year. As such, those enterprises that can harness the technology’s potential may enjoy a massive advantage. Notably, stock buybacks aren’t nearly as prevalent as they were in years past, with more companies focused on AI spending.

Nevertheless, rising demand for automation and accelerated productivity doesn’t come without risks. Some might argue that NVDA stock carries quite a rich valuation at almost 57 times trailing-year earnings. Plus, institutional investors have been noted trimming their exposure to the semiconductor firm. While institutional and insider selling don’t necessarily spell doom, it’s not exactly a confidence booster either.

The Direxion ETFs: Just about the only thing that’s clear regarding the tech leader is that speculators on both sides of the sentiment aisle have justification for their beliefs. In that regard, financial services provider Direxion offers two countervailing exchange-traded funds that allow market participants to take directional positions on Nvidia.

For the optimists, the Direxion Daily NVDA Bull 2X Shares (NASDAQ:NVDU) tracks 200% of the daily performance of NVDA stock. On the other end, skeptics may consider the Direxion Daily NVDA Bear 1X Shares (NASDAQ:NVDD), which seeks 100% of the inverse performance of the namesake security.

A key similarity that runs through Direxion ETFs is flexibility. Usually, traders interested in leveraged or short positions must engage the options market. However, financial derivatives carry complexities that may not be suitable for all investors. In contrast, Direxion ETFs can be bought and sold much like any other publicly traded security, thus mitigating the learning curve.

Still, traders targeting these funds must recognize their unique risk profile. First, leveraged and inverse ETFs typically incur greater volatility than standard funds tracking benchmark indices, such as the Nasdaq Composite index. Second, Direxion ETFs are designed for exposure lasting no longer than one day. Holding these ETFs longer than recommended may expose traders to value decay due to the daily compounding effect.

The NVDU ETF: Since the start of the year, the Direxion Daily NVDA Bull 2X Shares has gained roughly 46%. In the trailing six months, NVDU is up more than 119%.

• At present, the NVDU ETF is trading above the 50 and 200-day moving averages. It’s also riding support represented by the 20-day exponential moving average.
• Acquisition volume has noticeably faded since May of this year. However, from that point, volume levels have been relatively stable.

The NVDD ETF: Aligned with expectations, the Direxion Daily NVDA Bear 1X Shares hasn’t fared well in 2025, losing 42% year-to-date. In the past six months, NVDD is down over 38%.

• Currently, the NVDD ETF sits below the 50 and 200 DMAs. It’s also attempting to break above the 20-day EMA, which is imposing resistance.
• While the steepness of the red ink has generally faded, acquisition volume has dropped off since the summer, which could be problematic.

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