NVIDIA Corporation (NASDAQ:NVDA) is now an AI powerhouse, generating more than $47 billion from this business last year -- compared to about $10 billion from the video games industry.

Rosenblatt analyst Hans Mosesmann increased his price target to $200 while maintaining a buy rating on the shares. That represents potential upside of 53%.

This set the scene for Weekly Options USA Members to profit by 152% using a NVDA Weekly Options trade!

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Monday, June 24, 2024

by Ian Harvey

UPDATE

Artificial intelligence (AI) stocks have been powering market gains in recent times thanks to the technology's future potential. By using AI, companies can become more efficient, develop better products faster, and more -- and this has resulted in soaring earnings such as is the case with NVIDIA Corporation (NASDAQ:NVDA).

Nvidia is now an AI powerhouse, generating more than $47 billion from this business last year -- compared to about $10 billion from the video games industry.

In recent quarters, the company has reached record revenue, grown revenue and net income in the triple digits, and widened margins. Nvidia also holds 80% of the AI chip market and is known as the go-to source for premium AI chips.

Even Tesla CEO Elon Musk recently said: "There is currently nothing better than Nvidia hardware for AI."

Nvidia supplies the gold-standard graphics processing units (GPUs) that process the data, underpinning the latest advances in generative AI. The company was among the earliest converts to AI, turning its focus to the nascent technology more than a decade ago. That prescient move has paid off in a big way, giving Nvidia a significant lead on the competition.

Nvidia should continue its leadership due to the high demand for AI chips and related products and thanks to its innovations.

Nvidia is pledging to update its GPUs on an annual basis, which should keep it ahead of the crowd. Even if a rival releases a better chip today, a few months down the road, Nvidia will top that with its next GPU. Next up is the company's Blackwell architecture and most powerful chip yet, set for release later this year, and Nvidia says it will launch "other Blackwells" down the road.

Rosenblatt analyst Hans Mosesmann increased his price target to $200 while maintaining a buy rating on the shares. That represents potential upside of 53%.

Mosesmann is bullish on Nvidia's chips but notes that "the real narrative lies in the software that complements all the hardware goodness." The analyst goes on to suggest that Nvidia's market cap will climb to nearly $5 trillion over the coming year.

The analyst isn't the only one bullish on Nvidia. Of the 57 analysts who offered an opinion on the stock in May, 53 rated the stock a buy or strong buy, and none recommended selling.

The NVDA Weekly Options Potential Profit Explained.....

** OPTION TRADE: Buy NVDA JUL 262024 125.000 CALLS - price at last close was $5.70 - adjust accordingly.

Obviously the results will vary from trader to trader depending on entry cost and exit price that was undertaken.

Entered the NVDA Weekly Options (CALL) Trade on Wednesday, June 12, 2024 for $7.35.

Sold half the NVDA Weekly options contracts on Thursday, June 13, 2024 for $10.62; a potential profit of45%.

Sold the remaining NVDA Weekly options contracts on Thursday, June 20, 2024 for $18.50; a potential profit of 152%.

(This result will vary for members depending on their entry and exit strategies).

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Why the NVIDIA Weekly Options Trade was Originally Executed!

Trade Analysis

NVIDIA Corporation (NASDAQ: NVDA) continues to dominate the AI chip market. With a pioneering role in AI technology, NVIDIA's chips are integral not just for its own growth but also for the advancement of the entire AI sector.

Current Situation

NVIDIA has seen its stock price surge from a split-adjusted $15 to nearly $121 recently, becoming the second most valuable company globally, surpassing Apple. The company's strategic direction in AI and its recent 10-for-1 stock split have made its shares more accessible to a broader base of investors, potentially increasing trading momentum.

Key Insights from Earnings Call

During the latest earnings call, NVIDIA reported exceptional quarterly results, with significant contributions from its robust AI and computing segments. The company's forward-looking statements suggest continued leadership in high-performance AI technologies.

Catalysts for the Trade

NVIDIA's recent earnings were a testament to its strength, with a 262% year-over-year increase in revenue and a substantial jump in its data center business. The company's guidance for the upcoming quarters remains strong, reflecting sustained demand for its AI and computing solutions.

Further Catalysts for the Trade

Revenue Growth and Market Expansion

NVIDIA continues to expand its market reach, driving up its data center revenue by 427% year-over-year, now constituting the majority of its total revenue. This segment's growth is crucial as it supports the company's valuation and stock performance.

Earnings Performance and Market Expectations

With another impressive quarter, NVIDIA has set high expectations for future performance, with projected revenues indicating continued growth. This positions NVIDIA well within the technology sector, especially in AI and computing.

Analyst Reactions

Following NVIDIA's earnings release, several analysts have revised their price targets upwards, reflecting confidence in NVIDIA's ongoing growth trajectory and its ability to maintain a leadership position in the AI market.

Company Overview

Founded in 1993, NVIDIA started as a graphics chip company and has grown into a multifaceted tech giant. Its products now span multiple sectors including gaming, professional visualization, data centers, and automotive markets.

Technical Analysis

• Market capitalization: $297.44 billion.
• PE ratio: 7.07.
• Beta: 1.69.
• 52-week low: $38.62.
• 52-week high: $195.95.
• Fifty-day simple moving average: $95.35.
• Two-hundred-day simple moving average: $76.32.

Capitalizing on NVIDIA

This trade aims to capitalize on NVIDIA's continued dominance and growth in the AI sector. The company's robust earnings performance and strategic market expansions serve as strong catalysts for this option trade.

Therefore…..

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