'222% Surge' Nvidia, Will It Become the 'Next Tesla'?

NVIDIA's stock price has reached an all-time high, fueled by a surprise earnings report, attracting significant investment in call options betting on further gains. The securities industry is raising its expectations for NVIDIA.

According to data from the Chicago Board Options Exchange Global Market on the 24th (local time), over $100 billion (approximately 133 trillion KRW) has flowed into call options on NVIDIA stock this year, riding the AI boom. A call option on NVIDIA stock gives the holder the right to buy NVIDIA shares at a predetermined price at a specific time. The surge in call option purchases indicates that many investors are betting on further increases in NVIDIA's stock price.

The Wall Street Journal (WSJ) reported that the number of NVIDIA call option contracts executed in August was the highest this year, with the most contracts on August 22?just before the Q2 earnings announcement?being call options to buy NVIDIA shares at $500 per share, along with many call options in the $600?$700 range.

NVIDIA's stock price has surged 222% this year, achieving the best performance among S&P 500 constituents. The sharp rise in NVIDIA's stock price became especially pronounced following earnings reports for Q1 and Q2 that exceeded market expectations.

More investors are joining the rally with chase buying. Matthew Team, head of equity derivatives trading at Canter Fitzgerald, said, "Watching NVIDIA's strong surge, investors are dominated by a 'fear of missing out (FOMO)' mentality, fearing they will be the only ones not making money."

Global investment banks are also raising their price targets for NVIDIA. According to financial data provider FactSet, the target price for NVIDIA is $537, which is 14% higher than the closing price of $471.63 on that day. Warren Lau, an analyst at Aletheia Capital and a bullish NVIDIA proponent, recently raised his target price to $1,000.

The WSJ article titled "Is NVIDIA the New Tesla?" noted that the market enthusiasm for NVIDIA call options recalls the past excitement around Tesla call options, and a sentiment is spreading in the market that NVIDIA's stock price rally will continue.