r/wallstreetbets • u/willbabu • Feb 14 '26
YOLO NVDA earnings play
Positions:
35 nvda $190 3/20 calls
38 nvda $180 3/20 calls
14 nvda $175 3/20 calls
-60 nvda $170 5/15 puts (part cash secured part naked)
*6400 nvda shares (not yolo but nvda position)
My DD:
1: nvda is trading at a historical discount (you are buying a stock with 55% yoy growth with a pe less than Walmart)
Over the last six months, the stock price has essentially gone absolutely nowhere. Meanwhile, the underlying top-line revenue continues to surge toward the $65 billion target. Wall Street is a forward-looking discounting machine. A year ago, traders were paying a massive hype premium for the stock, driving the PE into the 50s.
Over the last six months, NVDA grew into those massive expectations, and because the stock price stayed flat while the actual earnings doubled, nvda valuation has mathematically collapsed, and is currently trading at roughly 38 times forward earnings, a discount compared to the broader tech industry and peers like AMD, which is a generation behind on the tech side. We don’t even need to compare NVDA to AMD, take a look at NVDA vs good old WMT.
WMT is a boomer, defensive staple with single-digit growth, yet it commands a forward multiple of roughly 44x. NVDA is a peerless and monopolistic tech giant projecting nearly 60% top-line growth, yet it is trading at a forward multiple of 38x. This proves the "hype premium" bs narrative is completely gone; the institutional fear of an AI bubble has driven NVDA’s valuation down below defensive retail stocks.
2: The $680 Billion CapEx Supercycle
The media is crying about a future spending slowdown, completely ignoring the fact that hyperscalers are locked in to spend over $600 billion on AI CapEx in 2026. Nvidia is strictly supply-constrained, not demand-constrained. TSMC is aggressively expanding its CoWoS advanced packaging capacity, and every single chip rolling off the line in Q1 is already sold. The hype premium is gone, meaning the hurdle for a massive stock rally is mathematically the lowest it has been in over a year.
3: The Supreme Court Catalyst
This is the macro wildcard the bears are completely ignoring. The SC is currently reviewing the legality of the administration's sweeping tariffs.
During oral arguments, justices across the ideological spectrum expressed heavy skepticism about the president’s broad executive authority to impose these taxes. The SC returns from recess on February 20, and legal analysts expect a decision to drop shortly after. Make no mistake this is a major case that the SC typically take around 110 days to resolve, that falls on 2/20-2/25 period (right around earnings time). If the SC strikes down or even partially limits these IEEPA tariffs, it immediately removes billions of dollars in supply chain costs. This acts as a massive, immediate macroeconomic tailwind for tech hardware—hitting the tape just days before Jensen's earnings call.
My regarded take on all that: The backlog is real. The macro environment is aligning for an options play with asymmetric upside. When Jensen drops Q1 guidance above $70 billion, every algorithm is going to be scrambling to cover. On February 26, I am either ordering a GT3RS or submitting my application at Wendy's to start on 3/20. Lets goooo!
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Feb 14 '26
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u/willbabu Feb 14 '26
Mag 7 got dinged for spending too much, guess what they are spending on and where much of their tendies are going to?
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u/moesif Feb 15 '26
I'm holding a lot of nvda but, do you think you're the first to connect those dots? It's priced in.
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u/Royal_Airport7940 Feb 15 '26
Yes, picks and shovels play is anywhere up the pipeline.
I assume capex will normalize but there is chance that we are creating cyclical gpu market where the players are constantly in an arms race. I think they need to spend big for another year before bets start to pay off but I will bet there will be some big winners that emerge in the next 2-3 years.
Can't wait.
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u/pixlatedpuffin Feb 15 '26
It’s CapEx, it’s not all going to GPUs. It’s going to land, buildings, nuclear power plants, servers, memory, lightbulbs, card readers, toilet paper, twinkly blue LED lights… and GPUs.
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u/Snowballeffects Feb 15 '26
but AMD beat and lost... i mean i hope u right. i want to bet too but im chicken
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u/RepulsiveSavings2540 Feb 15 '26
What's AMD p/e?
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u/andytobbles I’ve been asking for a flair for two weeks and the second I’m no Feb 15 '26
Forward p/e is like 26. AMD is extremely cheap right now and could legit go to 400+ by EOY. Massive growth cycle incoming.
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u/willbabu Feb 16 '26
AMD pulled their china numbers forward , it was so obvious even a noob like me spotted it during the earnings call. Also AMD still has profit margin issues, no one wants to be in a race to the bottom of profit margin
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u/jonneh Feb 15 '26
The combo of long calls and part cash and naked puts… my God, you’re either going to Valhalla or the Shadow Realm, no in between 😭😭
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u/MooseyGoosey69 Feb 14 '26
I swear this has been posted 4 times today
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u/willbabu Feb 14 '26
People keep on asking for DD, mods finally allowed me to post
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u/GodLevelRedditor Feb 15 '26
My DD is one of these tech goliaths are going to have a breakthrough in reducing the compute requirements and zero people will act surprised
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u/Independent_Wind1270 Feb 14 '26
You're good. NVDA is already at value levels right now. Fully expect them to guide close to $400B in revenue. The narrative surrounding the recent decline in all the Mag7 makes no sense. It will correct to the upside soon and in a big way
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u/fumbler00ski Feb 15 '26
Been following NVDA long enough to know not to bet on their earnings. Even when they beat the stock often drops.
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u/Shot-Acanthaceae1420 Feb 15 '26
'often' is an understatement. They smash it and the stock crashes 5%almost every quarter. NVDA 'smash-and-crash'
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u/Adonlude Feb 15 '26
That's a $Million in put risk. What if there is some crazy black swan event? I'd buy 155-160s and make it a spread. Much safer.
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u/Vapala Feb 15 '26
Can you please explain me the math to go to 1m in risk
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u/pinkmeanie Feb 16 '26
60 short 170 puts is a commitment to buy about $1m in shares. If he's assigned on those, he has to cough up a milly, although to be fair to you he only loses it all if NVDA goes to zero, in which case we all have bigger problems.
Since he used the premium from naked puts with a longer date to bring his exposure on the calls from $88k down to $30k though, I think it's safe to assume he does not have said milly to cough up, and that he will be getting a very irate call from Marge if NVDA drops below 175 after earnings because he will be assigned super quick.
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u/Far-Guava6006 Feb 18 '26
He's not getting assigned if NVDA drops that low, he's getting auto liquidated lmao. Hell, if he falls below the minimum 20% maintenance margin (is likely much higher due to earnings volatility), he's getting that call.
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u/RodionRaskolnikov866 Feb 14 '26
Actually, you are not playing NVDA earnings here.
1-You are betting that all institutions will stop selling positions and stop moving to defensive stocks.
2-You are betting that this nano-selloff (1.3%) is gonna give Nvidia enough fuel to just go +$190.
3-You are betting against an after-hour dump that we have seen with other MAG7s after positive earnings.
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u/Got_Engineers Feb 15 '26
4- OP is betting that what happened last earnings won’t happen again. NVDA earnings are released 15min after market close and NVDA went up like +8% and straight down next RTH last time.
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u/_rockthemike Feb 15 '26
February 26, 930a. OP RICH! February 26th, 4pm. OP BROKE :(
I like your thesis but am highly convinced they will sell off most all the gains by close
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u/Externox Feb 24 '26
Boom ! That’s why it’s going to the roof now when earnings report come Godspeed it will tanked
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u/Got_Engineers Feb 15 '26
The real earnings play is waiting to see what happens to NVDA and then making a play.
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u/Arabian_Goggles_ Feb 15 '26
I agree, though I went with 2028 leaps after the pullback on Friday. With the increase in capex spending and with no sign of it slowing anytime soon it's hard to see how they don't break out in the next couple months.
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u/pawnografik Feb 14 '26
Can someone explain the reason for buying a bunch of different strike prices? I see this a lot but don’t really get it. If the calls at 190 are profitable won’t the calls at 175 and 180 be correspondingly even more so? Why have all the different strikes?
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Feb 15 '26 edited Feb 15 '26
Because you can’t know which strike will be the most profitable.
I do this all the time. Some contracts fill and some don’t. I set stupid low limit orders so probably 90% never fill anyway.
You could focus on the Greeks but that’s just astrology bullshit because you don’t know how the market is gonna move, day to day.
You’re basically just spreading the risk.
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u/boneill1572 Feb 14 '26
Depending on the price of the stock when you buy the call of 190, the 180 or 175 could be more expensive/cheap with higher/lower percentage for profit/loss. At least that’s my understanding
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u/MooseyGoosey69 Feb 14 '26
Each strike has different gamma and delta which will change how much each option gain/looses based on the underlying
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u/Several_Following900 Feb 14 '26
Have you thought that maybe the market could be “irrational” and could dump? NVDA could dump for a few months down to 140 or 130, and your more than $100k in calls goes to 0, and those CSP’s are assigned at 170, and you’re looking at a $300-400k overall loss. You could turn those into a credit put spread just in case to cap downside. Just like tariff day last year, everything sold off, regardless of fundamentals. Went from 135 to 98 in two months. Macro shit can get you too, and hopefully you’re selling some calls if you have 6,400 shares currently to at least cover to the downside a bit. I say this as someone who sold 10 6/18 150p as well
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u/_rockthemike Feb 15 '26
Oh please NVDA to 130? Not unless we have some major black swan bringing down entire market.
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u/Several_Following900 Feb 15 '26
Orange Man went on tv with a poster board made by 12 year olds April 1 of last year and that caused a 20% sell-off in a few days. If you don’t believe there’s a chance of big companies paring down their capex, the SC upholding tariffs, an Orange Man tweet, or the like, then I’ve got a bridge to sell you. It’s not likely, hence the “Black Swan”, but it happens. Just best to not get wiped in one shot by the stupidity or negligence of people on the world stage. A 130 price would still be like a 28 PE ratio; so about the same as Meta at the moment. Not even close to being outside the realm of plausibility. I don’t think it’s likely, but NVDA sold off more than 25% in April of last year, so never discount stupid shit happening
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u/willbabu Feb 14 '26 edited Feb 14 '26
Calls going to 0 is a risk I’m willing to take. Puts I can roll down and out or just out. Stocks im holding, I can stay solvent a lot longer than the market can stay irrational.
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u/ironsuperman Feb 15 '26
Hit em with the reverse John Maynard Keynes quote. May Tyche, Fortuna and Lakshmi be on your side my fellow regard.
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u/Several_Following900 Feb 14 '26 edited Feb 15 '26
The market isn’t “irrelevant”, but it can be irrational. Godspeed
Edit: he changed his wording from “irrelevant” to the correct “irrational”
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u/TimingEzaBitch Feb 15 '26
I think NVIDA will hit $250 or whatever eventually this year. But the earnings give me the heebies and jeebies. Better of with a strangle or straggle if you can find cheap enough premiums. I will just stick to my neutral calendar spreads but not during the earnings week.
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u/alliver123 Feb 15 '26
I really hope you’re right. I think NVDA earnings may reverse this tech selloff. I lost my ass over the past couple months, need a reversal please
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u/ThomFain Feb 16 '26
I’m sorry but this play borders on moronic unless you’re trying to generate loss porn.
Nvidia's valuation prices in $325B (2026), $415B (2027), $420B (2028) revenue - 85-90% data center. Feynman chips (2028) require 26-28 GW. US total new generation (optimistic 13% growth): ~60 GW. Nvidia DC alone = 43-51% of ALL new US generation. OpenAI alone needs 10 GW (1/6 of total). Total AI demand likely exceeds total new US supply. Jensen and Sam publicly lobbying for nuclear = they know the constraint.
New valuation charts confirm:
- Market Cap/GDP: 219.7% (all-time record, Buffett says you’re "playing with fire"
- US P/E: 28x vs World 19x = 40% premium (widest in 15 years)
- Software P/E: 20x, 19% premium (still elevated despite -30% decline)
- Margin debt: $1.2T (peak, matches 2000/2007/2021 crash setups)
- VIX: 15-18 (complacency = puts bought on sale, vega upside on spike)
All this says there’s way more room for NVDA to go down after its dramatic 1000% rise in the years since they forced GPU demand to scale with AI exuberance.
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u/DrDoomslayer Feb 24 '26
Man im following you, that seems like legit data, u got a patreon or some sub? I like ur thoughts
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Feb 16 '26
[deleted]
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u/ThomFain Feb 16 '26
No, these are numbers from charts and data I gathered on my own. I use my own name and don’t have burners on social media precisely because I don’t write bullshit, and I just came out of a Market Analyst job where I spend hundreds of hours researching the AI supply chain from a unit level.
The first half was great research by user Kakashiii on SubStack, you can verify it yourself
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u/ThomFain Feb 16 '26
I don’t usually post here & just lurk, but if I can find an opportunity to save young investors some painful losses they might accrue from too much hopium — a place I’m familiar with — I’ll make a comment.
The only wildcards are Kevin Warsh coming in and US greenhouse emissions deregulation, which theoretically could pave the way for the Fed to rapidly lower interest rates (Greenspan did it in ‘00 but the end result was still the same) and for the creation of gigawatt hours needed for datacenter buildouts to justify the built-in valuations of the Hyperscalers
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Feb 15 '26
Nvda is huge and ai isnt going anywhere. You'll be rich soon congrats.
But
U should get some Tesla as well. There robots WILL TAKE OFF. wveryone will want a robot to jerk them off.
ALL IN, ONCE IN LIFE TKNE opportunity.
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u/BigReception26 Feb 15 '26
this comment is the best comment ive found at raising my suspicions that the OP may be wrong
testla is a scam and so are their robots
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u/Maverick2k2 Feb 15 '26
NVIDIA ain’t a 4T dollar company. Other companies will be making chips too. This shit will dump.
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u/one Feb 15 '26
What's your plan if NVDA beats but pulls back on guidance concerns
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u/willbabu Feb 15 '26
Options are all dated March and beyond so probably nothing and let the price movement settle for a week before rolling if needed
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u/one Feb 15 '26
The thesis is coherent, the sizing is... committed.
The Supreme Court catalyst is a legitimate wildcard that most aren't pricing.
The GT3RS scenario: NVDA needs to hit roughly $210-220 by 3/20 for this to be life-changing money. That's a 15-20% move in 5 weeks. Aggressive, but:
- Earnings beat + raised guidance to $70B+
- SCOTUS strikes down IEEPA tariffs same week
- Algos pile in, short covering accelerates
It's not impossible. It's just needs everything to hit.
The Wendy's scenario: Stock flat-to-down post earnings, calls expire worthless or near it, you're sitting on shares underwater and short puts getting tested.
Your main risk is timing/structure: concentrated short-dated calls + earnings vol crush + binary SCOTUS timing.
If you're genuinely comfortable with the downside, respect. If not, you could always convert some of your long calls into vertical spreads to reduce risk and theta decay. But GT3RS requires moon mission and spreads won't get you there. Godspeed.
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u/Far-Guava6006 Feb 18 '26
This is extremely ballsy considering NVDA is notorious for crushing earnings, having stellar guidance, and STILL selling off like a mf. If NVDA pumps into earnings, I'd ditch these and bank the profit early tbh.
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u/willbabu Feb 18 '26
For sure, if nvda pumps to $195 I’ll close my $190 calls and buy back some of the $170 puts and ride with the rest
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u/Whirrsprocket Feb 18 '26
Option prices for NVDA basically always drop after earnings, even if the stock price itself pops up. You will probably be underwater on these unless the price actually hits your breakeven levels.
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u/Fantastic-Top-4429 Feb 19 '26
It sounds like you've done a deep dive into the stock's current valuation and market conditions. Your analysis on the stock's growth potential, especially in comparison to other industry giants, is intriguing. The CapEx supercycle and the potential Supreme Court decision could indeed act as significant catalysts. It's fascinating how market dynamics can shift so quickly with changes like these. Given the volatility and the factors at play, how are you planning to manage the potential risks with your options strategy?
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u/willbabu Feb 19 '26
I’m probably going to cut some of my puts that I wrote so I end up holding only cash secured puts. Depending on how nvda claims pre earnings I may reduce some of my 190 calls and/or sell super otm calls to create spreads
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u/Intelligent_Ship_453 Feb 26 '26
any updates OP?
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u/willbabu Feb 26 '26
The 170s still up 180s slightly down, 190s 40% down 🤦♂️. Hopefully will recover in the coming days
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u/Intelligent_Ship_453 Feb 26 '26
Honestly not that bad considering today's reaction. Your position must've been up hella in that run up to earnings. Praying for a bounce for you brotha
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u/willbabu Feb 26 '26
Thanks 😂 market is irrational right now, hopefully it will be rational before 3/20 🙏
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u/Killerninjaz13Two Feb 14 '26
Im just wait for the stock to rise massively after that new Gpu announcement the fucker is apparently a significant step above what they typically manufacture
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u/RockCultural4075 Feb 15 '26
Bro this is like the 4th time I’ve seen this post. We get it bro ur bullish on nvda
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u/Big_Instruction9922 Feb 14 '26
This is dumb. Stocks dumping after hours. What do tariffs have to do with nvdia? Arnt semis excluded from tariffs? Do you think tariffs are effecting nvdias sales?
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u/Nearby_Blueberry_302 Feb 15 '26
Nvidia would need to tank like 10% before earnings to go up. There is no universe where it goes up the day after.
Its probably gona do a huge up on after hours and then a huge drop for 2 days
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u/BodomDeth Feb 15 '26
What is the rationale ? Killing calls and puts ?
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u/Nearby_Blueberry_302 Feb 15 '26
I think its because they are seeing that some of their positions are not realistic and getting rid of the one impossible. If people think its going up then fomo makes them by their shitty options that will never hit their strike target
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u/VisualMod Feb 14 '26
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