Expect a 'volatility vacuum' in the markets in August, says RBC’s Amy Wu Silverman
Speakers
Amy Wu Silverman
— Head of Derivatives Strategy, RBC Capital Markets
Summary
Amy Wu Silverman explains that hyperscaler stocks like Amazon and Microsoft are experiencing a volatility regime shift due to heavy capex and negative free cash flow, causing options to underprice realized moves. She also discusses growing anti-AI sentiment and local data center pushback as potential market risks heading into midterms, while August typically offers a volatility vacuum.
- Hyperscalers are beating implied earnings moves, a historic reversal
- Capex, debt, and negative free cash flow are driving a volatility regime shift
- Hyperscalers are dropping out of high-quality factor baskets
- Investor base is shifting as volatility bands change
- Option implied moves remain underpriced for the next earnings season
- August tends to be a volatility vacuum but midterms may reintroduce froth
- Anti-AI sentiment and local data center NIMBY pushback could become a market story
Ideas
Hyperscaler implied volatility remains underpriced
Hyperscalers like Amazon and Microsoft are undergoing a volatility regime shift because massive capex, debt issuance, and negative free cash flow make them more rate-sensitive and push them out of high-quality factor baskets. This caused realized earnings moves to far exceed option-implied moves this quarter, and implied volatility remains underpriced. Going forward, options markets will need to price in higher volatility as the investor base shifts and factor funds exit.
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This CNBC video, published August 04, 2026, features Amy Wu Silverman discussing AMZN, MSFT. 1 trade idea extracted by AI with direction and confidence scoring.
Speakers: Amy Wu Silverman · Tickers: AMZN, MSFT