HSBC double-upgraded NVDA to "buy" from "neutral"
Another analyst is excited about Nvidia Corporation's (NASDAQ:NVDA) artificial intelligence (AI) chips. HSBC double-upgraded the semiconductor stock to "buy" from "neutral" this morning, and nearly doubled its price target to $355 from $175. The firm noted Nvidia has more pricing power in its chips than previously anticipated. At last check, the stock is up 2.6% to trade at $276.87.
Overall options volume is running at double the amount typically seen at this point, with 229,000 calls and 215,000 puts across the tape so far. New positions are opening at the top five most popular contracts, led by the weekly 4/21 280-strike call.
This denotes a shift in sentiment, as data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows NVDA's 50-day put/call volume ratio of 1.13 sits higher than 94% of readings in its annual range.
Traders are pricing in low volatility expectations. This is per Nvidia stock's Schaeffer's Volatility Index (SVI) of 41% that ranks higher than just 8% of readings from the past 12 months. It's also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) sits at 91 out of 100, suggesting NVDA has exceeded volatility expectations over the past year.
A familiar ceiling at the $280 level -- which thwarted a late-March rally on the charts -- is containing today's pop. Shares are 89.5% higher in 2023, and 27.3% higher year-over-year.