To The Moon

NVIDIA’s stock has been a standout performer this year, and I believe its upward momentum is far from over. From the surge in AI demand to strategic moves that solidify its market leadership, NVIDIA is perfectly positioned to continue soaring for the rest of 2024. Let’s dive into why NVDA remains a top pick in my portfolio. 🚀

Strong Whale Activities towards the Upside

In the past 2-3 days, we observed a sharp spike in bullish option premiums for the strike level $125. This amounts to about 40-fold the premium we see for the strike $120. Something is clearly brewing! 🥸

Clues from Weekly Premiums Heatmap

Let's dig into the weekly premiums heatmap for a better look! The heatmap illustrates weekly net premiums spent on the top strikes and expirations, with net premiums calculated as the difference between call and put premiums. Green areas indicate positive net premiums, reflecting bullish sentiment, while red areas indicate negative net premiums, reflecting bearish sentiment.

We are seeing a strong close to 40Mil premium size for the expiration term for 2024-12-20 and strike level $125. We can expect to see this level likely to anchor the bottom for the stock by end-2024. Go figure! 

Data Centers: The Silent Giants Fueling NVIDIA’s Ascent

I know we like to look at NVDA through the lens of an AI giant. However... While AI grabs the headlines, NVIDIA’s data center business is quietly fueling much of its growth. As companies increasingly migrate to the cloud, demand for data centers—and by extension, NVIDIA’s GPUs—continues to climb. The big names in tech—Amazon, Microsoft, and Alphabet—are scaling their data center operations globally, and NVIDIA’s hardware is the preferred choice. Recent strategic shifts into areas like inference, data science, and machine learning are set to bolster its data center dominance further. The acquisition of Mellanox has also played a pivotal role, adding another catalyst to NVIDIA’s stronghold in this space.

Financial Muscle: A Balance Sheet Built for Expansion

NVDA also proves to be quite the juggernaut in terms of its financial prowess. NVIDIA’s financial health isn’t just strong—it’s exceptional. With $34.8 billion in cash, cash equivalents, and marketable securities against $8.46 billion in long-term debt, NVIDIA is not burdened by the kind of leverage that hampers many other companies. This financial stability isn’t just comforting; it’s a strategic weapon. With this war chest, NVIDIA can continue pursuing acquisitions, investing in growth, and rewarding shareholders—all without being overly reliant on borrowing. It’s rare to see a tech company of this magnitude with such fiscal prudence, and it’s one of the key reasons I’m bullish.

Riding the AI Wave: A Growth Engine Like No Other

Artificial Intelligence isn’t just a buzzword—it’s the core of NVIDIA’s explosive growth. The company’s GPUs are at the heart of generative AI and large language models, thanks to its Hopper and Ampere architectures. As industries from healthcare to finance scramble to integrate AI, NVIDIA’s advanced technology continues to be the backbone of this transformation. The surge in hyperscale demand and partnerships with leaders like Mercedes-Benz and Audi only strengthen its foothold in the automotive sector, where AI is reshaping autonomous driving and vehicle electronics. This ongoing demand isn’t just a flash in the pan; it’s a sustainable, multi-year growth driver that keeps pushing NVIDIA’s stock higher.

Looking Ahead: NVIDIA’s Bull Run is Far from Over

There’s no denying that NVIDIA’s story has been impressive so far, but I believe the best is yet to come. The company’s strategic positioning in AI, data centers, and a rock-solid financial foundation give it multiple avenues for continued success. For investors, it’s a rare combination of high growth, strong financials, and a clear vision for the future. As we look ahead to the rest of 2024, I’m excited to see NVIDIA reach new heights—and I’m confident that those who stick with NVDA will be handsomely rewarded.

Good trading, all y'all! [Cool]  

Thanks for @TigerTradingNotes