NVIDIA Corporation (NVDA)

Marries hardware and software and applying massive improvements to push product cycle forward. AI wouldn't exist if not for NVDA. Capex cycles do end, so it won't be the honeymoon period forever. But we're only in 4th-5th inning, much more growth to go on the capex front. Still underbuilt, undersupplied, AI still taking off. 

Earnings are coming up, and he thinks they'll beat and raise again. Yield is 0.02%.

They report Aug. 27. AI will remain a tailwind for productivity and economic growth. However, he liked NVDA when it was below $90 last April, but not at twice the price. It costs too much now, though he likes the company. Technically, it needs to fall to at least $150, in the range of $125-150.

They have a moat in terms of chips that run AI software, which keeps the #2 far behind.

It's good that they can now sell those chips to China (though pay a tariff and will result in an earnings hit). NVDA has had a lot of momentum.

Clear winner, because its chips make AI possible. There is some competition out there, but AVGO isn't one of them. Look for a good buying opportunity. 

He sees a parallel with INTC, which was a darling for many years. Not now. NVDA still has the market share; there are companies trying to catch up, but NVDA is still further ahead.

Likes technical superiority on AI chips.

He sold the Aug.15 180 strike for $3.50 (20% annualized). Sold 25% of his position to rebalance to slightly overweight.

Probably a good place to write some calls against it, especially as average analyst price target is ~$175. Over next few days, analysts will probably up price targets due to H20 chips being allowed to China. It'll be king of the hill for at least 18 more months. Should definitely be in your top 5.

The market cap topped $4 trillion today. It remains the king of the market, of tech, of AI. NVDA has created a revolution along the historic lines of the industrial revolution.

Used to make 75% gross margins, but those have jumped to 90%. If it goes back to historic gross margins, even if sales continue, you'll see a huge degradation in profit. Sweet spot in terms of demand. Market thinks it can do no wrong. Worries that demand will abate or just normalize. Good news is baked in. Watch your position size.

He loves the semis sector and this stock. It was upgraded today with an analyst raising the price target to $250, but he can't see NVDA shares double or triple.

It's not only about chips, but networking and software. Expects new highs.