DailyPlay – Opening Trade (NVDA) – August 27, 2025

NVDA Bullish Opening Trade Signal

Investment Rationale

Investment Thesis
NVIDIA Corporation (NVDA) reports earnings after the close today, and the setup into the print appears favorable. As the clear leader in accelerated computing and AI-driven infrastructure, NVDA remains uniquely positioned to capture growth across generative AI, hyperscale data centers, and advanced GPU deployments. Investor sentiment across semiconductors has firmed, and with NVDA’s recent consolidation resetting expectations, earnings could serve as the spark for renewed momentum. The stock’s positioning ahead of this catalyst supports a bullish stance.

Technical Analysis
NVDA has steadily reclaimed upside momentum, with shares now trading above the 20-day, 50-day, and 200-day moving averages. The recent pullback in August found support at the rising 50-day near $168 before the stock bounced back toward the $180–182 zone. This level represents short-term resistance but a breakout could quickly set up a retest of prior highs. The RSI at ~70 suggests strong momentum without yet flashing an extreme overbought signal, leaving room for continuation if earnings surprise to the upside.

Fundamental Analysis
NVIDIA continues to deliver industry-leading growth and profitability, supported by secular demand tailwinds in AI and cloud computing:

• Forward PE Ratio: 41.44x vs. Industry Median 25.33x
• Expected EPS Growth: 33.09% vs. Industry Median 12.09%
• Expected Revenue Growth: 32.41% vs. Industry Median 9.47%
• Net Margins: 51.69% vs. Industry Median 9.99%

These metrics highlight NVDA’s superior growth profile and operating leverage, with gross margins and cash generation far exceeding peers. While valuation is elevated, the premium appears justified given the company’s dominant position in one of the market’s most transformative technology cycles.

Options Trade
A defined-risk bullish strategy ahead of earnings is the Sep 5, 2025 $180/$195/$200 Call Butterfly, entered for a net debit of $4.87. The position profits if NVDA rallies into the $195 zone post-earnings, with a maximum potential reward of $1,013 at that strike. The strategy breakeven at expiration is at $184.87, anywhere above that level at expiration the trade is profitable, offering a favorable risk/reward ratio of better than 2:1. Structuring the trade as a butterfly reduces capital outlay while targeting a specific move higher, making it an efficient way to position bullishly into the catalyst. Note: this is a short-term trade with only 10 days to expiration, so there is assignment risk if the short options become deep in-the-money.

NVDA – Daily

Trade Details

Strategy Details

Strategy: Long Call Butterfly

Direction: Bullish Butterfly

Details: Buy to Open 2 NVDA Sep 05 $180/$195/$200 Call Butterflies @ $4.87 Debit per Contract.

Total Risk: This trade has a max risk of $974 (2 Contracts x $487) based on a hypothetical $100k portfolio risking 1%. This is a speculative, short-duration play centered around the earnings event, so we suggest risking only 1% of the value of your portfolio and divide it by $487 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher over the duration of this trade.

1M/6M Trends: Bullish/Bullish

Relative Strength: 10/10

OptionsPlay Score: 124

Stop Loss: @ $2.44 (50% loss of premium)

View NVDA Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View NVDA Trade