Bull v. Bear: NVDA Building Open Agent Safety Program, Buying Back $150B in Shares

to Fast Market. Here on Schwab Network, Nvidia is unveiling the biggest buyback in U.S. history. The Multitrillion Dollar company says it is greenlightin $150 billion share repurchase. This brings its total buyback authorization to 235 billion Shares are moving higher on the news, even amid a soft market. Meanwhile, as the scrutiny AI increases, Nvidia is rolling out a software platform designed to keep AI agents within the guardrails set by developers. The companyays its new open agent safety platform lets companies restrict what agents t they do. The launch follows incidents where AI agents reportedly went rogue, breaking out of control testing environments. N says Microsoft, Cisco, Oracle and other tech companies are partnering on it. Time now for the tug of war on Nvidia. For that, let's welack in our co-host Tom White and Kevin. Thanks guys. It is bull versus bear time. So beforee get to your example, Chase got to get Kevin, Iart with you. on Nvidi Your take. You know this is great news for the whole AI industry. Jensen Wong announcing this agent safety platform, bringing down the overall temperature and the panic level that is going through AI and the ptial to, you know, destroy humanity. They also make another big decision, which is that the cheapest valuation stock out there is their own. So they raised their buyback to $235 billion up $150 billion. Why not buy your stock. Everyone's talking about the valuation of Nvidia. You finally just gave a legitimate push to your stock. It's approaching the all high. You know it has a really good chance to onef these times it's going to go through. I don't know if it is, but it's now back up through or at or near $230. But ynow, this is a lot of good things. The stock buyback is, is kind of, you know, Jensen Wong saying the valuation out there our own stock. That's the value play. And then this overall safety platform. I think it just brings down the temperature and all the worries about AI. I think it's a reall good news day for AI stocks. Tom your take. Yeah. I think if you listen to some of the commentaries from Jensen Wong kind of describing, you know, this open agent safety pm where it's going to be an agent for the browsers, right? It's going to be an engineering solution to something that hasn'tn fundamentally probably watched or over sort at this point. And, you know, you listen to the commentary from anthropic CEO Sam Altman from open AI, where they're saying, yeah we need to pull back on this technology push. While Jensen Wong Mark Zuck were saying, no, you should just have better guardrails and a better system in place. And what he did was because, hey, he nee AI succeed, just like they all do, right? So an enginee solution to kind of fix that. And then you throw on top of it. Kevin mentioned the valuationofe on this company. When you've got competitors, you know double triple that some of them. So yeah, it was cheap. So why not b back their sIt sounds like a Warren Buffett move at this point. As fa as basically telling Wall Street that, hey, our stock's cheap and we'll put more of our free cash flow int bour shares as opposed to maybe investing in other compani or buying other companies at this point. So yeah, I think this is ty good solution when you're able to, you know, come up with a plan to kind of advance AI with better guardrails in place moving forward for everybody that uses it. And you mentioned it in, i in yiel about Nvidia and this, this new basic open agent safety platform, the partnerships that they've got are across tech and across the board. So that's probably going to be a positive where they'reil more chips. And that's what they're out there trying to do. And they're trying to sell their entire stack now. O All right. Let into the example trades. Kevin, let's start with yours. What's your approach today. My paper money trade today is a call diagonal going out a couple of weeks to the October 16th expiration.Buyt the money. Looking to this week the expected move just out till October 2nd is I'll recap it 0. 0 sellin October 2nd two 37.5 call a seven aalf dollars wide call diagonal. Tom. That this on is two weeks wide, so it gives you the opportunity to chip away at that. Net debit if you choose to e duration, if the market lets you at a fair price. So this is one that sets up gives you about 23, 22,g deltas and Nvidia. So it's it's got an up bias, but it's got that embedded vertical call spread that gives youtle more teeth in that spread as opposed to a cr spread that it's a little more of a passive one. This is a calenda spread wit an embedded vertical spread in there. Tom. The debit I, I looked at was about 590 trading over six and a quarter n the stock is moving higher as we speak. Tom. Yeah. Let's break this one down. Two week wide bullish call diagonal here that Kevin brought us an example trade going out to the October 16th. Monthly options that expire in 18 days. Buying call. That's the bullishike portion of this strategy. And then ast it in the near term October 2nd weekly options that expire this Frio in days sell the two 37.5 strike call which woua new fresh all time high if it gets up to that level. But you k profile, if you pay that 590 debit, as Kevin mentioned, probably about $0.30 above that right now because the stock has risen about ather dollarere since we looked at this earlier. But the debit you pay is going to be. S you're still paying less than the width of this call diagonal. And you can see here from the risk profile apex of profitability at or near wo 37.5 strike call, which is about that one standard deviation move that the option market's pricing in on this one because y're paying less than half the width of this seven and a half dollar wide bul call diagonal. Anything above maybe abo the 232 level is going to be profitability on this. And as Kevin mentioned, as you get closer to expiration over the next four days, you'll have that potential to roll those that short option on the two 37.5 strike call. Now remember they've got weekly options three times, right, that expire on Mondays, Wsdays,ys. So you can pick and choose which option you want, which option series you w to roll to to create credits. Creating creditss yourreakeven, lowers your risk on this trade. So keep that in mind. You gotsot short two 37.5 strike call over the next fourays also. But the idea here is you start collecting credits. That increases potential profitability and lowers your risk every time you're able to t credits on any potential rolls if the market's open. So thatressive but not overly aggressive because on a percentage basis, Kevindoee upside to get above maybe. 232233 to get into that profitability range on this bullish call diagonal. Kevin, I wentittle bit more passive 16th monthly option. So 18 days to expiration. I looked at where the stock topped out last time about two But that was all the way back in May. Was their all time high. So we're still about 2% off those levels. So I went j above that. Sold a short $5 wide call vertical. Sold the t 37.5 strike call, bought the two 42.5 strike call. So just $5 wide, collecting roughly about $1.40 credit.s trading higher. As we mentioned, stocks moved higher trading a buck 60 u collect is what you can make. So if you collect $1.40, 140 bucks with about $360 in r but that's allay above two, 42.5. Kevin takes your break even on this one up to 238 90. So I do have a cushion to upside before you start getting hurt on this one. Yeah. Tom's short strike on his vertical is higher than the all time high in the stock. And therefore the credit taken in its it's even higher. The break even is higher than the all time highn the stock. So the, you know, discussion youvef you're thinking about trading or investing in this this, do you it's going to go through that all time high or don't you. Because it's failed up there a couple times. We have no idea if the sto going to go through, but this is one that fades that move to the all time high.