The Actual Recommended Trade…..
** OPTION TRADE: Buy NVDA
MAY 28 2021 600.000 CALLS at approximately $9.20.
(actually bought for $4.50)
The Days Trading Explained…..
Options Members” entered a NVIDIA weekly options
trade on Monday, May 17, 2021 at 1:40pm – the low
point for the day due to the pullback - for $4.50.
By 10:33am, Tuesday, May 18, the price
of the option was up to $9.36 – a nice profit of 108%.
The stock price of NVIDIA receded from
this point which allows for another opportunity to enter the trade after taking
a good profit. The catalysts still apply!
Why The Trade Recommendation On NVIDIA?
The maker of graphics and high-performance
computing chips NVIDIA Corporation (NASDAQ:NVDA) reports earnings next
Wednesday, May 26, 2021, after the market closes.
NVIDIA is a market-leading provider of
graphics processing units (GPUs) and AI solutions. Its brand name has become
synonymous with best-in-class graphics in video games and high-performance
computing in data centers. In fact, NVIDIA has over 90% market share in the
supercomputing accelerator market.
Last year this semiconductor company
strengthened its position with the acquisition of Mellanox, a provider of
high-performance networking solutions. NVIDIA CEO Jensen Huang noted that this
move creates "significant product synergies," allowing the company to
take a more holistic approach to data center hardware design.
has had a tumultuous eight months. This year alone, NVDA has gone on several
runs, followed by steep drops. Shares have ranged in price; from a low of $462
in March to an all-time high close of over $645 in mid-April. Currently trading
in the $560 range — off April’s mark by about 13% — and approaching a
first-quarter earnings report that’s expected to be a blockbuster, seems to be
a good time for this options play.
The Major Catalysts for
The Trade on nvidia.....
on Wednesday, May 26, 2021.....
expected to release its Q1 fiscal 2022 results on May 26. Previously, though,
the company had already issued revenue guidance of $5.3 billion for the
quarter, plus or minus 2%.
On Apr. 12,
however, Nvidia announced that revenue for the quarter is tracking above those
projections. In addition, the company noted that it has sufficient supply on
hand to support sequential growth beyond Q1 — no small feat during a global
NVIDIA and Mellanox power eight of the top 10 supercomputers in the world. Even
more impressive, Italy's CINECA has selected NVIDIA GPUs (and Mellanox
networking) to power the world's fastest AI supercomputer, the Leonardo. Once
built, the system will deliver 10 exaflops of performance, making it nearly 19
times faster than Japan's Fugaku, which currently tops the list of the world's
Cathie Wood's ARK Invest analysis, accelerators like NVIDIA GPUs will displace
central processing units (CPUs) as the dominant processors in data centers by
2030, growing at 21% annually over that period. That opens the door to a $41
billion market opportunity for the chipmaker.
factoring in other use cases like enterprise and edge AI, management believes
its total addressable market in the data center sector will actually hit $100
billion by 2024.
Arm-based Tegra CPUs power infotainment and navigation systems for high-end
automakers like Audi and Lamborghini. They also power its Drive onboard
computers for autonomous vehicles.
generated 3% of its revenue from automotive chips last quarter. That's just a
tiny sliver of its business, and the unit faced severe headwinds last year as
the pandemic disrupted the production of new vehicles. The global semiconductor
shortage could further delay that recovery.
those headwinds wane, NVIDIA's automotive business should recover and gradually
account for a larger slice of its revenue. Until then, NVIDIA should continue
to generate high double-digit percentage revenue and earnings growth as it
sells more gaming and data center GPUs.
are hot once again, which means that demand for graphics processing units
(GPUs) for crypto mining rigs is through the roof. Nvidia has been through this
cycle before and learned a painful lesson. Crypto miners can be big business,
but they compete against NVDA’s core customer base for graphics cards. That
results in bad PR when stock runs out. Plus, the crypto market can dry up
without warning. In 2018, this effect hammered NVDA stock when miners suddenly
though, the company is doing things differently and managing the crypto market
much more carefully. Acknowledging mining as an actual line of business, NVDA
created a GPU specifically for that market. Additionally, it took measures to
prevent miners from snapping up all its new consumer GPUs. New graphics cards
will automatically throttle performance if used for crypto mining.
RTX 3000 series GPUs are still in short supply, but consumers aren’t competing
against crypto miners to buy them now. Meanwhile, the new crypto cards are
selling better than expected. In its Q1 earnings update, the company noted that
it has already sold $150 million worth, compared to the projected $50 million.
is in the midst of acquiring enterprise communications platform Slack
Technologies in a $27.7 billion cash-and-stock deal. Assuming the deal closes,
Slack will provide Salesforce with a jumping-off point to cross-sell its CRM
solutions to small-and-medium-sized businesses.
is a custom designed, Arm-based processor aimed at data centers. NVDA says that
its first data center CPU is optimized to deliver 10 times “the performance of
today’s fastest servers on the most complex AI and high performance computing
Nvidia has always been about GPUs, so its first data center CPU is a shot
across the bow of PC processor leaders. If Grace lives up to claims, it has the
potential to significantly grow Nvidia’s data-center market. Back in Q4, that
market brought in $1.9 billion.
announced new devices across its portfolio and launched a new bit of gaming
software. To begin with, the company unveiled a new wave of gaming laptops,
flaunting its latest GPUs. This was followed by the reveal of new collaborative
laptops with the likes of Dell (NYSE: DELL) and other consumer hardware names.
On top of all that, Nvidia GPU owners now have access to GeForce NOW, powering
optimal cloud gaming experiences.
analyst Tristan Gerra rates the stock an Outperform (i.e. Buy) along with an
$800 price target, which implies ~45% upside. The bull thesis is based on "Nvidia’s strong near-term positioning
in AI data center markets and longer-term opportunities across many accelerated
"As Nvidia increasingly moves
to platform solutions targeting and enabling all AI markets, while diversifying
its architecture offering, the company is poised to over time dominate data
center. Omniverse gives us an early glimpse of a virtual 3D world which Nvidia
is at the forefront and ultimately yielding to a matrix computing world. More
near term, GTC-announced foray into CPUs will expand Nvidia's computing
fewer than 27 analysts have put reviews on NVDA on record, and of those, 24 are
to Buy against just 3 to Hold. NVDA shares are selling for $550.34; the average
price target of $682.20 implies an upside of 24% from that level.