DailyPlay – Opening Trade (NVDA) – May 28, 2025

NVDA Bullish Opening Trade Signal

Investment Rationale

Investment Thesis:
NVIDIA Corporation (NVDA) heads into today’s earnings report after the close with a constructive technical setup. As a leader in accelerated computing, NVDA is well positioned to capitalize on growing demand for generative AI, hyperscale data centers, and advanced GPU architectures. The upcoming report could serve as a catalyst for renewed upside, especially as sentiment across the semiconductor space has improved following recent market-friendly headlines. With the stock regaining positive momentum and expectations reset after a period of consolidation, a strong earnings print could reignite the bull case for NVDA.

Technical Analysis:
NVDA recently reclaimed key moving averages, with the price moving above the 200-day ($116.64), 50-day ($124.12), and 20-day ($136.96) levels, suggesting a potential trend reversal. A sustained break above $140 would reinforce the bullish case and open the door for a move toward previous highs near $150. Recent trading has been marked by elevated volume, reflecting strong market interest and growing conviction behind the move.

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

• Forward PE Ratio: 31.35x vs. Industry Median 25.82x
• Expected EPS Growth: 27.81% vs. Industry Median 11.18%
• Expected Revenue Growth: 29.73% vs. Industry Median 11.62%
• Net Margins: 55.85% vs. Industry Median 5.98%

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:
Consider a bullish call vertical spread for NVDA earnings, balancing upside potential with defined risk. Buy the NVDA Jun 20, 2025, 138/155 call vertical spread. The maximum reward is achieved if NVDA closes above $155 at expiration. The $138 strike is just above current levels, while the $155 strike gives the stock room to run if the earnings a breakout toward recent resistance highs, offering an attractive 2.78:1 reward-to-risk ratio. With only 24 days to expiration, this structure capitalizes on a sharp post-earnings move while limiting losses if the report disappoints.

NVDA – Daily

Trade Details

Strategy Details

Strategy: Long Call Vertical Spread

Direction: Bullish Debit Spread

Details: Buy to Open 4 NVDA June 20 $138/$155 Call Vertical Spreads @ $4.50 Debit per Contract.

Total Risk: This trade has a max risk of $1,800 (4 Contracts x $450) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $450 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to break out above its current trading range.

1M/6M Trends: Bullish/Bullish

Relative Strength: 7/10

OptionsPlay Score: 104

Stop Loss: @ $2.25 (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