Nvidia Hits New Highs Again, How to Seize Investment Opportunities

What happened in the semiconductor industry last week:

The semiconductor manufacturing giant ASML reported its earnings. ASML's third-quarter orders were only half of market expectations, and due to weak demand outside the AI sector, the company downgraded its 2025 sales guidance. The earnings decline led to a more than 16% plunge in ASML's stock last week. "Without AI, the chip market would be very bleak," ASML's CEO, Christophe Fouquet, stated during a conference call last week.

Subsequently, TSMC also released its financial report, showcasing very impressive performance and raising its 2024 sales guidance, which caused its stock price to rise by more than 9% that day. TSMC's CEO, CC Wei, stated during a conference call last Friday, "AI demand is real, overall chip demand is stabilizing, and beginning to improve."

It is evident that the entire semiconductor industry is currently in a state of gradual differentiation, and the ability to win in AI competition will be a very important factor for the industry. Gabelli Funds analyst Ryuta Makino also shared this view, predicting that "the differentiation in the chip industry will continue at least until 2025." NVIDIA is precisely the giant most worth discussing in the AI chip industry.

NVIDIA is often referred to as the most popular 'shovel seller' in the entire AI industry. In this context, besides purchasing NVIDIA's stock, what other avenues can investors explore to capitalize on NVIDIA's growth?

Purchasing call options is a way to gain greater returns when the stock price rises. For example, if you buy a Nvidia call option with a strike price of $142, expiring on 25th October, at a current price of $102, and if NVIDIA's stock price rises to $145 by 25th October, the value of this option will be at least $300, your investment return will be 200%. Buying call options allows investors to trade with a lower purchase cost, thereby amplifying the profit. Of course, buying call options can also result in a total loss of the principal. If NVIDIA's stock price does not reach above $142 by October 25th, the option will become worthless, and you will lose all your principal.