Nvidia Stock Named a "Top Pick" at UBS

The equity sports an over 115% year-to-date lead

Digital Content Manager
Dec 21, 2021 at 10:10 AM
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Chipmaker Nvidia Corporation (NASDAQ:NVDA) is higher today, last seen up 0.7% to trade at $279.11, after UBS named it a "top pick," citing its "wide moats" in the sector. Plus, the company is enjoying tailwinds from Micron Technology's (MU) upbeat quarterly report, with officials noting they expect the chip shortage to ease over the coming year.

The last time we checked in on Nvidia stock, the Federal Trade Commission (FTC) was suing the company to prevent it from acquiring tech provider Arm. The security has taken a step back from its Nov. 22, record high of $346.47, though the $270 level has emerged as an area of support. And while overhead pressure looms at its 20-day moving average, NVDA is up 115.8% year-to-date.

The brokerage bunch is firmly bullish towards the equity. Of the 26 analysts in coverage, 23 call it a "buy" or better. What's more, the 12-month consensus target price of $339.86 is a 19.2% premium to current levels. 

The equity could benefit from a shift in sentiment over in the options pits. This is per NVDA's Schaeffer's put/call open interest ratio (SOIR) of 1.21, which ranks in the 86th percentile of its annual range. This indicates near-term put open interest outweighs call open interest by a wider-than-usual margin. 

It's also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) sits at 92 out of 100, suggesting NVDA has exceeded options traders' volatility expectations over the past year.


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