Editor's note: Any and all references to time frames longer than one trading day are for purposes of market context only, and not recommendations of any holding time frame. Daily rebalancing ETFs are not meant to be held unmonitored for long periods. If you don't have the resources, time or inclination to constantly monitor and manage your positions, leveraged and inverse ETFs are not for you.

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in NVDA.

Nvidia Corporation (NVDA) stands at a critical juncture as it prepares to report its fiscal Q1 2026 earnings on or around May 28. Once a GPU juggernaut best known for gaming hardware, Nvidia reinvented itself as the beating heart of the AI hardware boom.

Its chips now power everything from ChatGPT to supercomputers and enterprise-grade data centers. But the road from trillion-dollar triumph to sustainable dominance is paved with new questions—regulatory roadblocks, fierce competitors, and sky-high expectations.

In recent weeks, tech stocks have seen renewed volatility, with tariff-related concerns acting as a major overhang. A wave of U.S. trade actions—most notably President Trump’s proposed reciprocal tariffs—rattled investor confidence, particularly among semiconductor firms with China exposure.

While Nvidia’s H100 and Blackwell chips are currently exempt, market jitters have led to broader sector pullbacks, taking the company along for the ride. The stock is off recent highs, trading with increased sensitivity to headlines, just as earnings approach.

The upcoming report isn’t just about past performance—it’s about whether Nvidia can justify its premium multiple in a geopolitical minefield. The company’s narrative remains dominant, but the margin for error seems to have narrowed.

Below is a daily chart of NVDA, as of April 16, 2025.

Source: StockCharts.com

Candlestick charts display the high and low (the stick) and the open and close price (the body) of a security for a specific period. If the body is filled, it means the close was lower than the open. If the body is empty, it means the close was higher than the open.

The performance data quoted represents past performance. Past performance does not guarantee future results.

Bull Case: AI Leadership and Robust Demand

Nvidia’s long-term story is still one of accelerating relevance. If you believe in the exponential growth of AI—and the infrastructure behind it—Nvidia remains at the center.

Strong Data Center Performance: In its most recent quarter, Nvidia reported record revenue of $39.3 billion, a 78% year-over-year increase, with data center revenue surging to $35.6 billion, up 93% from the prior year, according to Nvidia Q4 and FY25 earnings.

Blackwell GPU Launch: The launch of Nvidia’s Blackwell GPU architecture marks the next chapter in AI infrastructure. With enhanced memory bandwidth, compute throughput, and energy efficiency, Blackwell’s debut drew widespread excitement. CEO Jensen Huang called demand for Blackwell “insane” and noted that several hyperscalers had already committed to future deployment.

Strategic Partnerships: Nvidia has expanded collaborations with AWS, Microsoft Azure, Google Cloud, and Oracle, ensuring its hardware is embedded deep within the AI cloud stack. These partnerships aren’t just sales channels—they’re strategic endorsements of Nvidia’s ongoing relevance in enterprise AI deployment.

Bear Case: Regulatory Hurdles and Market Pressures

Still, even titans stumble. And for all of Nvidia’s momentum, potential pitfalls loom—some of which are out of its hands.

Export Restrictions: The U.S. government’s tightened export controls on high-performance AI chips to China, including the H20 series, could dent Nvidia’s bottom line. The company has forecast a $5.5 billion revenue impact due to the restrictions, especially as those chips were tailored for China in response to earlier sanctions.

Competitive Landscape: Rivals are gaining ground. AMD is rolling out its MI350 AI accelerators, and newer entrants like China’s DeepSeek are challenging Nvidia’s grip on inference workloads with leaner AI models. The narrative of “no real competition” is starting to erode.

Margin Pressures: Even with top-line growth, Nvidia’s gross margin guidance in the last reported quarter came in slightly below expectations at 71%, reflecting early costs from ramping up Blackwell chip production—something to watch if input costs or efficiency gains lag.

Trading NVDA’s Earnings Setup from Either Side

Whether traders lean bull or bear on NVDA, Direxion’s leveraged and inverse single-stock ETFs can help them position.

Direxion Daily NVDA Bull 2X Shares (Ticker: NVDU) seeks daily investment results, before fees and expenses, of 200% of the performance of the common shares of Nvidia Corporation (NVDA).

Direxion Daily NVDA Bear 1X Shares (Ticker: NVDD) seeks daily investment results, before fees and expenses, of 100% of the inverse (or opposite) of the performance of the common shares of Nvidia Corporation (NVDA).

These ETFs are designed for active traders looking to express a short-term view—whether that’s confidence in Nvidia’s continued AI dominance or caution about short-term macro and regulatory headwinds. With earnings just around the corner, the market may soon reveal which side has the edge.

*Definitions and Index Descriptions

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing. A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com. A Fund’s prospectus and summary prospectus should be read carefully before investing.

The Funds have derived all disclosures contained in this document regarding NVIDIA Corporation from publicly available documents. In connection with the offering of each Fund’s securities, neither the Funds, the Trust, nor the Adviser or any of its respective affiliates has participated in the preparation of such documents. Neither the Funds, the Trust nor the Adviser or any of its respective affiliates makes any representation that such publicly available documents or any other publicly available information regarding NVIDIA Corporation is accurate or complete. Furthermore, the Funds cannot give any assurance that all events occurring prior to the date hereof (including events that would affect the accuracy or completeness of the publicly available documents described above) that would affect the trading price of NVIDIA Corporation have been publicly disclosed. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning NVIDIA Corporation could affect the value of a Fund’s investments with respect to NVIDIA Corporation and therefore the value of the Funds.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with NVDA and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with NVDA and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to NVDA is impacted by NVDA’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to NVDA at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to NVDA increases on days when NVDA is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with NVDA and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to NVDA is impacted by NVDA’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to NVDA at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to NVDA increases on days when NVDA is volatile near the close of the trading day.

NVIDIA Corporation Investing Risk — NVIDIA Corporation faces risks associated with meeting the evolving needs of its large markets – gaming, data center, professional visualization and automotive – and identifying new products, services and technologies; competition in its current and target markets; changes in customer demand; supply chain issues; manufacturing delays; potential significant mismatches between supply and demand giving rise to product shortages or excessive inventory; among other risks.

Semiconductor Industry Risk – Semiconductor companies may face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources or personnel and may face risks related to the availability of materials.

Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production cost.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily NVDA Bear 1X Shares, Shorting or Inverse Risk. Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

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