Hey everyone, Jared Ley here from Peak American Financial Group with your trade of the day. Let’s talk about a stock that’s been making waves: NVIDIA. With earnings coming up on the 28th, everyone’s trying to figure out where this stock is headed, and I’m here to share my insights.
Why I’m Bullish
First off, NVIDIA has been a hot topic for good reason. The top analysts I track have a price target of $150, which is about $25 more than where it’s trading right now. My algorithms also show a high probability of a strong earnings report that’s likely to beat consensus estimates.
But let’s step back and consider why some analysts aren’t as bullish as they could be. There have been reports of delays with NIVIDIA’s new chips based on the Blackwell architecture. If these delays impact rollout, it could affect future earnings. However, NVIDIA still has a massive backlog and is seeing incredible growth in its data center sector, which is a major driver of their success.
Now, let’s talk numbers. NVIDIA is about to report a whopping $28.2 billion in earnings, marking its fifth consecutive triple-digit year-over-year growth period. That’s impressive by any standard.
A Smart Option Strategy to Consider
So, what’s the smart play here? If you own NVIDIA stock, currently around $125, consider this options strategy: Buy the September 6th 124 put and sell the September 6th 131 call. This trade, known as a collar, will cost you just 90 cents. What does this do? It limits your downside to $124, meaning you can only lose $1 on the downside, but it allows for at least a $6 upside run.
I’m bullish on NVIDIA, but it’s essential to be strategic, especially if you’re trading options around earnings reports.
Stay smart and trade wisely!
CLICK HERE to watch my segment on Business First AM covering this trade.
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