A flurry of call-buying activity in Nvidia Corp (NVDA) stock, stretching out to 2025, has caught the eye of Ritholtz Wealth Management’s Josh Brown – and for good reason. Someone is betting big on Nvidia reaching $190 within the next six months.
Brown, appearing on CNBC’s ‘Fast Money Halftime Report’ on Thursday, highlighted unusual bullish options activity in Nvidia, extending to March 2025. This suggests that traders believe the AI chipmaker will continue its climb to new highs in the coming quarters.
“Here you have the second largest market cap company in the world, basically trading at an all-time record high, and you see monster, monster call buying at the March strikes from like $150 all the way up to $189,” Brown said. “We’re talking about thousands and thousands of contracts. This is not retail money.”
This trade is particularly noteworthy because it’s so far out of the money, or far away from the strike price, and has significant time value built into the options premiums. According to Unusual Whales, Nvidia saw its biggest net premium surge in call options over the last two weeks.
With Nvidia shares trading just below $135 at the time of writing, the stock would need to climb over 40% to reach the $189 level. Nvidia shares have already gained 170% since the start of the year and more than tripled in 2023.
“I think it becomes emblematic of what this stock has been able to do despite lackluster performance from the other gigantic tech mega caps,” Brown remarked.
Brown emphasized that this trade isn’t a hedge against another position. The only reason someone would enter such a trade is to bet on a significant upward move in the stock.
“It’s just so tough to bet against this thing. Every time you think it’s over, it’s like it’s just getting warmed up,” Brown said.
CNBC reported that Nvidia call volumes were twice as high as put volumes on Thursday.
Nvidia shares were up 1.31% at $134.38 at the time of publication. The massive call-buying activity signals strong confidence in Nvidia’s future, fueled by the ongoing boom in artificial intelligence (AI). With the company’s dominance in AI chip technology and the surging demand for AI-driven applications, the market is betting that Nvidia is poised for further growth in the coming years.
