We had a great opportunity to invest in Nvidia (NVDA) after President Donald Trump announced the Stargate Project, a major initiative aimed at advancing AI technology. With cutting-edge GPU technology, NVDA is at the forefront of AI, machine learning, and high-performance computing, making it a prime candidate to leverage this project. This initiative aims to strengthen national security, healthcare, and economic competitiveness through AI, and NVDA’s expertise in these areas will enable it to achieve significant growth. Looking at NVDA’s chart, it has been trading in the $130-$150 range since October, setting the stage for a potential breakout. Share price momentum (RSI) suggests there is considerable room for further upside in the short term. A breakout to the upside would then target $180 as an initial upside target, based on the move up into the trading range. Fundamentally, NVDA is vastly undervalued. NVDA is expensive relative to its peers at 31x forward earnings compared to the industry median of 20x, but its superior growth metrics and profitability justify this valuation. NVDA has forward EPS growth of 65% (industry: 14%) and revenue growth of 57% (industry: 7%). Additionally, we boast an industry-leading net profit margin of 56% compared to the industry’s 20%. These numbers highlight NVDA’s ability to outperform its competitors in terms of profitability and growth, and suggest that significant upside potential remains despite its premium valuation. NVDA’s superior financials: Forward P/E: 31.16x vs. industry median 19.76x Forward EPS Growth: 64.73% vs. industry median 13.67% Forward Earnings Growth: 57.44% vs. industry median 6.71% Net Profit Margin: 55.69% vs. Industry Median 19.87% Trades NVDA on Project Stargate To take full advantage of the potential, we recommend using a bullish call spread. Specifically, we purchase the March $141/$165 call vertical with a $7.63 debit. This includes: Buying the March $141 call for $11.33 Selling the March $165 call for $3.70 This trade structure provides: Maximum per contract if NVDA is above $165 at expiration. Compensation: $1,637. If NVDA is less than $141 at expiration, your maximum risk is $763 per contract. The break-even point is $148.63, calculated by adding the floor strike and the net debit paid. (See this trade at the updated price on OptionsPlay.) This strategy allows us to benefit from NVDA’s expected growth driven by Project Stargate’s focus on AI, while reducing downside risk for the premium paid. while still being able to influence stock price movements. With NVDA’s strong technology position and excellent fundamentals, this transaction is well aligned with the company’s optimistic outlook for its future in the wake of this important government initiative. Disclosure: (none) All opinions expressed by CNBC Pro contributors are solely their own and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliates, and are not intended to be used on television, radio or the Internet. , or may have been previously disseminated on television. Another medium. The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. The content is general in nature and does not reflect your unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Click here for full disclaimer.
Nvidia could be a big winner from President Trump’s Stargate AI project. How to maximize profits in trading
By NvidiaDaily
