AI Tailwinds, Quarterly Win Send Chip Stock Surging

NVDA is now trading at its highest level since April

Fernanda Horner

Digital Content Manager

Feb 23, 2023 at 10:03 AM

NVDA

Nvidia Corporation (NASDAQ:NVDA) is up 14.8% to trade at $238.32 at last check, after the chipmaker reported a fourth-quarter earnings and revenue beat. What's more, Nvidia announced a better-than-expected first-quarter revenue forecast amid stronger demand for chips to power artificial intelligence (AI) services.

The security is collecting price-target hikes this morning, with more than 20 firms raising their price objectives, including Jefferies and Evercore ISI to $300, from $275 and $245, respectively. This is impressive because analysts were already firmly bullish on NVDA, with 20 of the 27 in coverage calling it a "buy" or better.

Overall options volume is today running at five times the intraday average volume, with 353,000 calls and 303,000 puts exchanged so far. The most popular contract by a long shot is the 2/24 240-strike call, followed by the 230-strike put in the same series, with new positions being opened at both.

There's been a penchant for bearish bets in the options pits of late, per Nvidia stock's Schaeffer's put/call open interest ratio (SOIR) of 1.24 that stands higher than 92% of readings from the past year -- indicating a put-bias among short-term options traders.

Today's bull gap have the shares breaking through the $230 level -- which rejected a rally earlier this month -- to trade at their highest level since April. So far in 2023, NVDA has added 41%, with support from its 30-day moving average emerging back in January.

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