Bull v. Bear: NVDA New All-Time High, Analyst Names Top Stock Pick

get your podcasts. We're back on Fast Market here on Schwab Network. Nvidia nailing a new all time high today after Morgan Stanley reinstates it as a top semiconductor pick. The drivers that MSCs are earnings estimates continuing to rise and investors being willing to pay more for those earnings. The analysts sees says it sees upsi to Nvidia's fiscal 2028 revenue guidance, saying management'secast of roughly 70% year over year growth is too conservative, dem. Morgan Stanley has a $300 price targ an overweight rating on the shares. This comes in a week when CEOnng spent time in Washington with other AI leaders, signing on to a new voluntary accord to essentially manage risk in the industry. Shares of Nup more than 20% year to date, outpacing gains in the broader markight, time now for the tug of war on Nvidia. For cohost Tom White and Kevinn ou Hanks. It is bull versus bear time. Before we get to your example trades. Got to get your thoughts on Nvidia. Kevin, I'll start with yur take. You know Nvidia has been that company that even Jensen Wong has made comments that the stock was getting cheap on a valuation perspective. It li around $200 and slightly higher for what seemskd actually, you know, spent despite great earnings, it spent some time even below $200 on some sell offs. Why? Well, it's widely held. Ss going to get caught up in that. But this meeting they had with Morgan Stanley, well, where post meeting Morgan S reiterated it reinstates it as its top pick in semis. I read something from the note. It was interesting. power shell is what they're working on for for the future. I like how they made that so easy and concise to figure out. But we're all this time that it has sat between 100 and $95 and 215 back and forth, and you could put up a three year chart. It's been quite a while. It kept earning. So the valuation kept coming down down and down and down. And what really may have chang tone for Nvidia, the stock buy back. Right. Apple has executed it expertly in their history. I think you may see Nvidia start to do the same because their $235 billion stock buyback. That isve. is firepower they have behind the stock. So it'll probably go with the overall market right as it does it' widely held like this. But overall itls like there's a tone change here in Tesla. Tom and Diane. Tom, your take on Nvidia. Yeah, I think if you take a look at it, you know Kevin mentioned the buyback. That was the big trigger. We were in that 190 to 210 range forever until about a month ago where we broke out hitting all time highs today. But I think th is about the full stack, the moat that they're creating when they used to ju focus on the GPU side of their business. Now they've got GPUs bundles, right? They've got proprietary software with Cuda, theot network networking hardware with spectrum X, Ethernet InfiniBand. And then they've got their own CPUs. With the Vera Rubin moving forward into the realm of AMD and Intel, right? So they're getting that tack that's creating that big moat. And I think that's a pretty positive. If you l at their growth rates over the last couple of quarters, just the data center alone, that surged 117% to aboutbillion in Q2. And if you take a look at the proje that they gave now, they went out to 2028 and gave projections. I think the growth rate was supposed to be about 45 to 5 what Wall Street anticipated. They gave a 70%enue growth rate for fiscal 2028. So they're extendingir guidance moving forward. And that's what investors really liked in that in that particular report. And you know, this is a widely held stock, right? It's it's a biggest component in tdaq 100 and the S&P 500 also. So yeah, it's it helps the market's overall when you see the biggest com within the major indices start hitting new fresh recor breaking out to the upside. Okay let's get into the example trades. Kevin let's start out with yours. What's your approach today. one last tidbit. If you're looking for $6 trillion market cap. 24939 is where it comes out. It comes out for me is where tck has to trade to hit $6 trillion. So now there's a lot of good news, a lot of good news flow. However,e cognizant of, and that is it's in the mid 60s in of relative strength. It's getting close to overbought. So my paper money trade is still bullish but it's modestly bullish. It's a two week call calendar spread. Buying the October 23rd selling the October 9th. 245 so just you know slightly higher less than $10 higher from where we are right n Stocks. I put it in around 250 trading within a nickel of tha right now. Tom. So not a ferocio bullish play in Invidia, but something that will probably be profitable. It stays rangebound or slightly higher from here. Tom. And because it's a week wide, you do have a chance to chip away at that. Net debit via rolling or extending duration.mt this. Gives you some upside exposuren th two week wide bullish call calendar here. Going out t October 23rd weekly options that expire in 21 days by th 245 strike call out of the money by about nine bucks to the upside. Sell that same 245 call in the October 9th wptions that expire in just a week, paying roughly. We've got 230 debit on he where it was trading earlier. The stock did dip back below 235. Now we're bac above 236 at this point. But the debit you pay is going to be your risk. So if you pay 230 or 250 there's your risk $230 spread on this. But you can see here from Kevin's trade atx is out around 245 would be fresh all time highs right ve pre between maybe 237 on the downside maybe 253254 on the upside to potentially be profitable. And Kevin made a good point as far as trade management goes. The idea here is the stock goes up near 245. But you got a nice wide range for this to trade in fotoy profitable on this one. And as you get closer toxpiration over the next seven days, you have that ability ootential to roll that short option. And that creates credits, right? What does that credit do? Well, it reduces your initial risk, right? It increases potential profitability and it limits yourxposure, right? When you're taking credits in on those adjustment the here is you see a grind higher. But even if the stock goesmaybee right here, you can probably potentially profitable on this one, depending on the roll values and the expansion of this, because this, thiscalendae as you get closer to 245. And as youet clo expiration over the next seven days on your short option where you can buy that back, roll it to another weekly option or close the traepending on how much it expands, but giving you what you don't want to happen. You don't want the stock to go down from hr yot want the stock to explode above maybe 255. That's when you start los profitability on the upside here. So two week wide bullishall calendar that Kevin brought us. Kevin, I looked at something a little bit different that need to move to the downside but not that much. I looked at a bearish put butterfly here and I d ma an unbalanced or broken wing. Put butterfly. It's an equidi put butterfly. Going out to the October 16th monthly option. So just two weeks to expiration. I'm going to buy one of the 2 strike puts basically just out of the money to the downside by one of the 235 puts. Sell two of the strike puts and then buy one of the 215 puts. it's basically a $10 wide Equidistance put butterfly t doo pay roughly earlier it was trading two bucks, about a nickel cheaper than that right now. But the debit you pay on this isoing to be your risk also. Right. So $200 per spread is your risk. Now where do you want the stock to go. Well you want it to go down below. 233 that's a break even. And then remain above. 217 so you can see that range that I've got between, know, those break evens. That's the profitability range, right? Where does apex out. Right at or near that strike where I sold two opt at the 225 level. So Kevin, we atalk about butterflies where, you know, they're, they're cheaperte for some, you know, some directional bias here, but they're cheap sometimes for a reason because you need it to wt doesn't really start to expand until the last few until expiration on this bearish put butterfly. Yeah. A butterfly is is a risk defying strategy long in this case a putertica short put vertical. The the middle strike is whathey share. In this case it's the 225 put middle strike. That's your target onation. You know we we talk about buies lot. You get paid late. So if it's going to mak a move towards $225 you'd prefer it does it closer to that October 16th expiration. So you get somewhere close to that peak on the risk graph. But they pay off exponential if you're right Tom, as yo know. But they're very difficult to pinpoint. Sometimes we make the analogy. It's like hitting a bullet with a bullet. You got to get it near that strike on expiration day near 3:0 if you do, if the situation comes up right, you could haven. Yeah. And that's always the key. Kevin. When we bout these butterflies is that, you know, the risk rews pretty good. You're risking 200 to make a potential 800 if it's at or near that 225 strike, but it's got to be close to expiras where you really start seeing the expansion as far as this. looking for some downside exposure here. If younk Nvidia is going to pull back