English
Back
Download
Need Help?
Log in to access Online Inquiry
Back to the Top
Storage sector surge: How long will the super cycle last?
Views 13.6M Contents 585

Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?

avatar
ImSteven joined discussion · Jan 6 03:57
Happy New Year guys! I'm Steven~How is it going with your holiday and... you portfolio?
Since the start of the year, semiconductors have fallen into a clear “equipment strong, design weak” regime. By “equipment,” we mean like ASML, TSMC, and KLAC—businesses centered on chip manufacturing, lithography, and inspection/metrology.
In contrast, the most cutting-edge—and historically the highest-margin—segment of the industry, chip design, has been underwhelming. The U.S. “big three” design leaders—NVIDIA, AMD, and Broadcom—remain stuck near the lows. Even Intel, despite a steady flow of positive headlines, delivered a classic gap-up, fade, and close-weak session on January 5, leaving investors disappointed.
Most notably, NVIDIA’s CES event on January 5—traditionally viewed as an important trigger—failed to provide any meaningful lift this time. That raises two pressing questions: When does “equipment strong, design weak” reverse? And what is the right way to position in NVIDIA today?
1 CES Takeaways: NVIDIA Is Selling the Next Platform Cycle, Not Just the Next Chip
Let’s start by scanning the key messages from NVIDIA’s CES presentation.
On the CES 2026 stage, NVIDIA effectively pulled forward its next-generation AI platform roadmap. Jensen Huang’s keynote centered on rack-scale computing and a more system-level upgrade: tight coordination across GPU, CPU, interconnect, networking, DPU, switching, and the broader infrastructure stack. The point was clear—over the next two years, competition will be less about single-chip performance and more about end-to-end platform efficiency, scalability in deployment, and ecosystem stickiness.
That naturally leads to NVIDIA’s next strategic emphasis: AI moving beyond data centers into the physical world. The company repeatedly highlighted “Physical AI”—the idea that when models go beyond understanding text and images and begin to perceive, decide, and act in real-world environments, the earliest large-scale applications will be autonomous driving and robotics. From an investment perspective, this framing is an attempt to expand NVIDIA’s TAM from “cloud training + inference” into “machine intelligence in the real world,” while folding the software stack, developer tools, and partner ecosystem into the valuation narrative. In other words, NVIDIA isn’t trying to sell a single generation of hardware—it’s trying to define the platform standard for making machines work.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
2 Fundamentals: Market Is Paying for Visible Earnings—Why Equipment Leads
For all the ambition embedded in the “Physical AI” narrative, the market’s stance is not “listen to the story,” but “show the execution.” At the moment, investors appear unwilling to aggressively re-rate NVIDIA on vision alone. Instead, they prefer to pay for near-term earnings visibility—and that’s precisely why semi's equipment sector (ASML / TSM /KLAC) is strong right now.
As memory chip's pricing improves and supply tightness returns in parts of the stack, the equipment segment tends to be the first to benefit. Equipment revenues are more directly levered to capex and utilization, and the market often treats these as the earlier-cycle expression of an improving semiconductor environment.
But this does NOT mean the market has “given up” on NVIDIA, as well as other designers, Broadcom, Qcom, AMD, and Intel. On the contrary, the current hesitation—what looks like “dead time” on the tape—often turns out to be a favorable window for long-term investors to build positions. The simplest approach is to accumulate the stock and hold. For investors who understand options, the toolkit becomes significantly richer.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
3) Options Market Check: IV Has Rebounded—Premium Selling Is Back on the Table
In our piece late last year Nvidia’s IV "Crashes" to a 1-Year Low — The Short-Put Window Narrows. How Should Traders Position?, we noted that NVIDIA’s implied volatility (IV) had compressed sharply, with IV percentile dropping to a one-year low.
But after the New Year holiday, what’s surprising is that IV has already rebounded, and IV percentile has risen to ~32. That shift matters: it improves the setup for premium-selling strategies.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
Looking at the options chain—for example, the series expiring roughly six months out (July 2026)—both calls and puts are priced with IV above 40%, and IV tends to rise as strikes move deeper ITM on the call side and further OTM on the put side. In other words, ITM calls and OTM puts carry relatively elevated IV.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
From an open-interest perspective, the chart below summarizes option positioning with expiries within the next two months. You can see call open interest materially exceeds put open interest. Strike-wise, call OI clusters around 185, 190, 195, and 200, suggesting investors are still structurally positioned for upside. On the put side, there’s only a modest peak around 180—those contracts may represent either shareholder hedges or selective bets on a short-term pullback.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
4 Options Strategies
With IV clearly higher, the overall backdrop has become more favorable for the short-vol / short-premium playbook. Investors may consider either a single-leg short put or a multi-leg structure such as a short strangle.
(1) Short Put
A short put framework typically comes in two variants: assignment-intended (“take delivery”) and assignment-avoiding.
A. Assignment-intended short put (willing to get assigned)
Given NVIDIA’s stock is sitting at relatively depressed levels and the valuation doesn’t look stretched, investors may still be able to use short puts to get paid while placing bids for shares at meaningfully lower levels.
– Strike: ~10–15% below spot
– Tenor: no more than ~3 months
Trade thesis: You’re effectively betting that over the next three months, NVIDIA could experience a meaningful pullback—and you’d welcome that drawdown as an opportunity to buy stock at a lower effective price, while collecting premium along the way.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
B. Assignment-avoiding short put (primarily harvesting premium)
If you do not want to take assignment, you can move both strike and tenor further out:
– Strike: ~20–25% below spot
– Tenor: ~4–6 months
Even though the strike is lower (safer), the longer tenor can still provide adequate premium.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
(2) Short Strangle
If your base case is that NVIDIA remains range-bound, a short strangle can be considered. However, we must respect a crucial asymmetry: NVIDIA is a structurally bullish, high-beta compounder—when an uptrend starts, it can be fast and violent.
That means the short call leg must be treated with discipline and cautions:
– Keep the call tenor short, ideally structured to expire well before any potential 2026 momentum phase could fully develop.
– Choose a far OTM call strike to maximize defensive room.
The short put leg, on the contrary, can be longer-dated and does not need to be as far OTM, using the strike/tenor guidelines discussed above. Thus we form a so-called asymmetric short strangle structure. You can clearly see the asymmetry of the payoff structure of this strategy in the chart.
Equipment Strong, Design Weak — Post-CES Flat: When Will NVIDIA Take Off?
Closing Thought
The current “equipment strong, design weak” tape is not a verdict on NVIDIA’s long-term thesis. It’s a reminder that markets pay for visibility and timing—and right now, that visibility is concentrated in the equipment and capex-linked portion of the stack.
For NVIDIA, the opportunity lies in using this consolidation phase to build exposure deliberately, and for options traders, the rebound in IV re-opens a range of structured, premium-driven strategies—as long as the risk on the short call side is kept under strict control.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
51
4
2
+0
27
Translate
Report
497K Views
Comment
Sign in to post a comment

View more comments...

avatar
ImSteven
3322
Followers
52
Following
5332
Visitors
Follow