Nvidia Bulls Pour Millions in Call Options Days Ahead of Financial Results: Options Chatter
$NVIDIA (NVDA.US)$ attracted a bullish $7 million block trade in call options days before the semiconductor giant is due to release its financial results that are widely expected to reaffirm the company’s market leadership.
An active buyer purchased call options that give their holder the right to buy 1.85 million Nvidia shares at $205 each in the next 21 days. The strike price of that out-of-the-money call option is about $15 above the current price, signaling the buyer’s optimism that the stock could keep rising over the next three weeks.
Revenue growth for the dominant supplier of advanced chips that power artificial intelligence is expected to accelerate to 57.1% in its fiscal third quarter ended Oct. 31, from 55.6% in the previous three months, according to the average of analysts’ estimates compiled by Bloomberg. Gross margin is seen rising to 73.7%, from 72.5% in the previous quarter.
"We expect something of a breakout quarter vs. recent trends," Morgan Stanley analysts including Joseph Moore wrote in a note to clients Friday. "Our industry checks are showing material acceleration, as NVIDIA has fully resolved earlier issues with the racks, and demand has continued to surge."
(To see more of Nvidia's financial data, click on the earnings hub here.)
While Nvidia has rallied about 41% this year, the company that has more than 80% share of the market for AI chips lagged $Advanced Micro Devices (AMD.US)$’s 108% gains.
“NVIDIA stock has done well, but on a relative basis sentiment has lagged as ASIC, AMD growth potential has captured investors' imaginations,” the Morgan Stanley analysts said, as they raised their price target on the stock to $220, from $210.. “Blackwell remains the AI chip of choice and Vera Rubin demand signals are VERY strong; competitor enthusiasm reflects progress but also a very strong market.”
While there were also bearish block trades posted so far Friday, the biggest are bullish transactions.
Share your thoughts on Nvidia in the comments section. Do you see Nvidia shares climbing to a fresh all-time-high? Let your voice be heard by voting below. And if you want to read more options columns like this one on AMD, or this one on Palantir, follow me here, where you can also find my earnings stories on some of the biggest stocks.
Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Opening new options positions close to or on their expiration date comes with substantial risk of losses for reasons that include potential volatility of the underlying security and limited time to expiration. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period. Certain complex option strategies carry additional risk, including potential losses that may exceed the original investment amount. If applicable, supporting documentation for any claims will be furnished upon request.
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Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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Minotor : someone sold these options
75731809 : i hope so…. but billions in sell offs compared to 7mill call is nothing
Daddy432 : Sounds like insider trading, and some really scammy shit going on
venkym : Flow is rollover from 220 to 205 call, so chk combination to that trade as well.we have hint from trump AI bubble dont care kind. lets see how ER turn the market
75989640 : Hello Everybody,
an ge la : Trick retail investors into buying at the peak... Tsk tsk tsk.
an ge la : Tricked again.
桀 : 175 short selling
ML48 Minotor : one would not likely sell them unless they were covered/fully hedged.
Master Stock : when all the plebs are buying calls chances are it will fall
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