NVDIA is a long term hold for me. My target price is about $1200. Their earnings shown a growth of about 8%. However, Nvidia is making a China Complaint chip for the China Market that is said to launch this year, I can only see more growth ahead unless there's a change in future news. I will continue to sell calls and puts to optimise RoR. Their graphics and data center side still strong as usual.
I was expecting a +-15% change after earnings report and its currently up 8% after market, It's a good report and I'll get to keep the premiums from my strangle. Wouldn't mind buying more at 545 or selling at 940 (highly unlikely by this week).
$NVDA STRANGLE 240223 PUT 545.0/CALL 940.0$
Things to take note:
- Still increasing demand for AI chips, gpu for gaming and datacenter which nivida practically has a stronghold. As seen in report YoY, QoQ.(bullish)
- NVIDIA will continue to optimise cost as they already have the foundation, as for competitors they will have huge capex to research and produce. (bullish)
- Although the high stock price, its still cheap compared to other chip companies at little over 30 PE. (bullish)
- Almost every sectors (entertainment, healthcare, advertising, content creators, ecommerce etc) using generative AI and generating strong returns. (bullish)
- Many big companies (META, ADOBE, SNOWFLAKE) require NVIDIAs chip for generative AI. (bullish)
- Almost all EV companies using AI are working with NVIDIA (bullish)
- Google making an AI chip that would require less computing power meaning less demand for NVIDIA chips (bear - have to track the progress)
- Softbank seeking 100b to compete with NVIDIA (neutral, softbank, probably gonna lose 60-70% of their investment after ipo)
Earnings call guidance was good with good continued growth with slight margin compression but i think its nothing too worrying. Although my target is $1200, I feel NVDA will be ranged bound 600+_700+ for awhile, earn some extra with strangles. Just my opinion.
Modify on 2024-02-22 07:35
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To the moon!!