Posted 2/27/2024, 12:29:00 PM
BofA: Nvidia Call Options Still a Good AI Stock Bet Despite Recent Rally
- Buying Nvidia call options remains a good way to profit from AI gains, says BofA, as volatility is underpriced
- BofA says options markets are underestimating outcomes for AI stocks like Nvidia despite the post-ChatGPT rally
- Nvidia's actual stock moves after earnings were much bigger than the options market predicted
- Nvidia has the most expensive 3-month at-the-money call options as a percentage of share price out of AI peers
- Nvidia call options have a 92% probability of breaking even, highest among Tesla, AMD, making them an effective upside play