Nvidia (NVDA) Offering Possible 44.93% Return Over the Next 20 Calendar Days

Nvidia's most recent trend suggests a bullish bias. One trading opportunity on Nvidia is a Bull Put Spread using a strike $172.50 short put and a strike $167.50 long put offers a potential 44.93% return on risk over the next 20 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $172.50 by expiration. The full premium credit of $1.55 would be kept by the premium seller. The risk of $3.45 would be incurred if the stock dropped below the $167.50 long put strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Nvidia is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Nvidia is bullish.

The RSI indicator is at 73.18 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here


LATEST NEWS for Nvidia

Soaring Tech Stocks on Cusp of Worst Earnings Season in 6 Years
Thu, 28 Mar 2019 09:14:20 +0000
Dismal guidance from industry giants such as Apple and Intel signals a sharp slowdown in tech sales.

Nvidia (NVDA): Looking Like Intel (INTC) Isn’t Necessarily a Great Thing
Wed, 27 Mar 2019 22:03:52 +0000
Following Nvidia’s (NVDA) announcement of the Mellanox (MLNX) acquisition earlier this month, the company CEO, Jensen Huang mentioned that they would not pursue any additional acquisitions according to Reuters at a conference.Of course, it’s hardly surprising given the epic price tag of $6.9 billion to acquire Mellanox, which stretches Nvidia’s balance sheet. Nvidia had $7.4 billion in short-term assets and cash equivalents on the balance sheet based on its Q4’19 earnings. If anything, Nvidia cannot afford to make another all-cash transaction anytime soon, which would require the company to rebuild cash on its balance sheet, but to rebuild another $7 billion in short-term cash could take several years.While the Mellanox deal sounds practical on the surface it also paid a 7x sales multiple for a business that generated $1.08 billion in revenue in FY’18, and profits of $114 million in FY’18. Meaning, Nvidia paid 60.5x prior-year earnings to acquire the company, which doesn’t afford Nvidia a whole lot in the way of earnings accretion, though they mentioned that there would be immediate accretion in terms of sales and earnings following a Q4’19 (calendar year) transaction close.The main reasoning for the acquisition was tied to datacenter market share, which is one of the few areas, which still exhibit meaningful revenue growth compared to client computing markets or basically end-consumer purchases of graphics cards. Heightened emphasis on datacenter silicon means paying a massive premium in this environment, but it also exposes Nvidia if in the event they need access to more cash, or if market conditions worsen, as they have in the prior quarter whereby sales declined by 24% over prior year and dil. EPS also declined by 53% year over year.Perhaps, the acquisition of Mellanox helps with diversifying revenue, as Mellanox has been able to post steady revenue growth figures for the past five-years. Though, the recent acquisition premium could come at a time where much of the growth is already priced into the business.Nvidia stock has continued to trend higher following the announcement, because it could help cushion the lumpiness of the graphics market cycle (which we have seen recently).Risks tied to the acquisition didn’t seem to matter, because shareholders seemed to like the transaction. This is partially driven by the rapid growth spurt of Nvidia’s graphic business, which isn’t as sustainable as it was in prior years. There’s bound to be added competition from AMD’s impending graphics card launch, which will include ray-tracing, and Nvidia’s full-year financial outlook implied flat year on year business comps.Nvidia only markets graphics cards, so the addition of network interconnects makes it somewhat less dependent on its graphics business, which is a first in its entire corporate history.Mellanox has steadily grown its revenues by 18.25% per year since FY’15, and with the transition to ethernet switches (datacenter connectivity) needed for high bandwidth HPC (high-performance computing) Mellanox has been able to demonstrate heightened revenue diversification away from its InfiniBand business.This transitions Nvidia into both graphics and network connectivity, effectively looking more and more like Intel. But, looking more and more like Intel isn’t necessarily a great thing, because Intel has gone through periods of stagnation even after paying a lot of money to acquire companies.Intel wasn’t able to grow shareholder value despite its high-profile acquisition of Altera ($16.7 billion) and Mobile Eye ($15.3 billion). After throwing $30+ billion at large acquisitions, Intel has remained range bound between $40 to $50, and that’s even after producing steady financial results.Likewise, Nvidia’s latest acquisition could have a similar effect (some excitement initially among shareholders), but when financial results get reported over the next couple years, it’s still going to be a graphics dependent business with some additional categories that marginally contributes to financial results.Disclosure: Alex Cho has no positions in Nvidia or Mellanox. Read more on NVDA: * Nvidia: Investor Day Sets Bullish Tone for the Stock * Nvidia’s (NVDA) Analyst Day Spotlights the Value of an Ecosystem, But the Stock Is Overvalued, Says Needham * Nvidia’s GPU Technology Conference Kicks Off; Rosenblatt Maintains Buy on the Stock * Nvidia (NVDA) Makes an Eyebrow-Raising Acquisition; Here’s What Analysts Had to Say More recent articles from Smarter Analyst: * Analyst Sings the Praises of Amarin (AMRN) Stock Following ADA Endorsement * What the New EU Legislation Means for Facebook (FB) and Alphabet (GOOG) Stocks? * Is Micron (MU) Stock a Buy? Deutsche Bank Says Yes * Biting Into Apple's (AAPL) New Surprise for Investors

Xilinx’s High Margins Make It an Outlier in Semiconductor Downturn
Wed, 27 Mar 2019 21:40:02 +0000
Xilinx Is on Track to Become Best-Performing Chip Stock of 2019(Continued from Prior Part)Xilinx’s gross margin Xilinx (XLNX) is witnessing strong revenue growth with the growing adoption of FPGAs (field programmable gate arrays) in the data

Best Growth Stocks for April 2019
Wed, 27 Mar 2019 20:43:32 +0000
Given unusual buy signals alongside revenue and earnings growth, these stocks could be worth a spot in a growth-oriented portfolio.

Is Xilinx the NVIDIA of 2019?
Wed, 27 Mar 2019 20:10:02 +0000
Xilinx Is on Track to Become Best-Performing Chip Stock of 2019(Continued from Prior Part)Xilinx’s earnings growth Xilinx’s (XLNX) stock is the best-performing semiconductor stock of 2019 with a 46% YTD gain. The stock’s momentum is being

Be Sociable, Share!

Related Posts

 

MarketTamer is not an investment advisor and is not registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory Authority. Further, owners, employees, agents or representatives of MarketTamer are not acting as investment advisors and might not be registered with the U.S. Securities and Exchange Commission or the Financial Industry Regulatory.


This company makes no representations or warranties concerning the products, practices or procedures of any company or entity mentioned or recommended in this email, and makes no representations or warranties concerning said company or entity’s compliance with applicable laws and regulations, including, but not limited to, regulations promulgated by the SEC or the CFTC. The sender of this email may receive a portion of the proceeds from the sale of any products or services offered by a company or entity mentioned or recommended in this email. The recipient of this email assumes responsibility for conducting its own due diligence on the aforementioned company or entity and assumes full responsibility, and releases the sender from liability, for any purchase or order made from any company or entity mentioned or recommended in this email.


The content on any of MarketTamer websites, products or communication is for educational purposes only. Nothing in its products, services, or communications shall be construed as a solicitation and/or recommendation to buy or sell a security. Trading stocks, options and other securities involves risk. The risk of loss in trading securities can be substantial. The risk involved with trading stocks, options and other securities is not suitable for all investors. Prior to buying or selling an option, an investor must evaluate his/her own personal financial situation and consider all relevant risk factors. See: Characteristics and Risks of Standardized Options. The www.MarketTamer.com educational training program and software services are provided to improve financial understanding.


The information presented in this site is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing in our research constitutes legal, accounting or tax advice or individually tailored investment advice. Our research is prepared for general circulation and has been prepared without regard to the individual financial circumstances and objectives of persons who receive or obtain access to it. Our research is based on sources that we believe to be reliable. However, we do not make any representation or warranty, expressed or implied, as to the accuracy of our research, the completeness, or correctness or make any guarantee or other promise as to any results that may be obtained from using our research. To the maximum extent permitted by law, neither we, any of our affiliates, nor any other person, shall have any liability whatsoever to any person for any loss or expense, whether direct, indirect, consequential, incidental or otherwise, arising from or relating in any way to any use of or reliance on our research or the information contained therein. Some discussions contain forward looking statements which are based on current expectations and differences can be expected. All of our research, including the estimates, opinions and information contained therein, reflects our judgment as of the publication or other dissemination date of the research and is subject to change without notice. Further, we expressly disclaim any responsibility to update such research. Investing involves substantial risk. Past performance is not a guarantee of future results, and a loss of original capital may occur. No one receiving or accessing our research should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing any applicable prospectuses, press releases, reports and other public filings of the issuer of any securities being considered. None of the information presented should be construed as an offer to sell or buy any particular security. As always, use your best judgment when investing.