Nvidia Stock Bounces Back On 2 Big Analyst Price Targets

Nvidia options are attractively priced at the moment

Managing Editor
Jun 26, 2018 at 9:53 AM
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For the second time in two weeks, Nvidia Corporation (NASDAQ:NVDA) received bullish commentary from the analyst community. This time it was Benchmark that initiated coverage on the chip name with a "buy" rating and $280 price target. The analyst in coverage noted that NVDA is in "the middle of many of the hottest computing trends," boasting about the company's data center business in particular. Meanwhile, FBN Securities weighed in with a fresh "outperform" rating and $300 price target.

At last check, NVDA was up 2.3% to trade at $244.69, meaning even the lower price target from Benchmark represents a 14.4% premium to the stock's current perch. On the charts, Nvidia stock has continued to outperform, rising 60.6% year-over-year, with recent pullbacks contained by its 30-week moving average. The shares hit a record high of $269.20 back on June 14.

Despite the recent run of bull notes, brokerages are still split on the stock. Of the 25 analysts covering the security, 10 still rate it a "hold" or "strong sell." While NVDA's consensus 12-month price target sits at $280.03, there is still clearly ample room for more upgrades to the surging chip stock.

Options buyers have preferred calls in the past 10 days. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Nvidia stock has racked up a 10-day call/put volume ratio of 1.74-- in the elevated 79th annual percentile. This indicates that traders have bought to open NVDA calls over put at a faster-than-usual clip during the past two weeks.

Digging deeper, the July 265 call saw the largest increase in open interest during this time frame. According to data from the major options exchanges, the majority of the activity at this strike has been of the buy-to-open kind, indicating options traders are banking on NVDA to vault higher within the next three weeks. 

Meanwhile, now's a great time to target short-term options on the semiconductor concern. This is according to its Schaeffer's Volatility Index (SVI) of 35%, which ranks in the 16th percentile of its annual range. 

 

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