Options trading in semiconductor stocks, driven by the AI market frenzy, has doubled in volume, with daily average notional volume exceeding $145 billion in February. Nvidia Corp. accounted for almost four-fifths of the trades, with its market value soaring and pulling the semiconductor index up by more than 23%. The rapid expansion in options trading may indicate investors playing catch up after missing out on last year’s rally, and options offer a way to bet on further gains in chip makers while providing protection if the rally slows down.
Super Micro Computer Inc.'s stock has surged over 1,000% in the past year, potentially surpassing Nvidia Corp. as the best-performing stock in the S&P 500. The company's market capitalization has increased by $48 billion, reaching nearly $64 billion, and it is set to be added to the S&P 500 Index later this month. This move will increase AI representation in the index and could potentially drive the S&P higher. Despite some recent volatility and short seller activity, Wall Street remains bullish on the company, with 11 buy ratings and a high price target of $1,300.
Super Micro Computer Inc., a partner of Nvidia Corp., is generating over half of its revenue from AI-related server sales. Despite reporting strong fiscal first-quarter revenue and raising its annual guidance, investors should be cautious of the potential risk associated with the company's heavy reliance on AI-related server sales.
Concerns are rising about the impact of a potential 10% fall in Nvidia Corp. stock on the S&P 500 index and Nasdaq Composite, as Tesla Inc. has already seen a 20% decline in its shares over the past three months. The recent poor earnings report from Nvidia has added to worries about the stock's performance.
Hedge fund Appaloosa LP, led by David Tepper, has revealed new positions in Advanced Micro Devices Inc. and Apple Inc., while dropping its position in Tesla Inc. The fund also increased its stake in Nvidia Corp. and Meta Platforms Inc. Additionally, Appaloosa increased its holdings in Amazon.com Inc. and Microsoft Corp., while shedding stakes in Salesforce Inc. and Tesla Inc. Tepper's moves align with George Soros, who also reported new positions in AMD, Nvidia, and Microsoft, while selling Salesforce shares. Appaloosa also established new positions in chip-related stocks such as Intel Corp., Lam Research Corp., Broadcom Inc., Marvell Technology Inc., Micron Technology Inc., Qualcomm Inc., and Taiwan Semiconductor Manufacturing Co.
