With Or Without Crypto Mining Demand, This Tech Stock a Buy

Led by Bitcoin, cryptocurrencies are moving higher. That’s great for cryptos themselves, as well as a number of companies that play to integrating cryptos into the existing financial system and the public’s mind.

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  • However, many tech companies have been burned, as crypto mining has gone in and out of favor over the years. That’s created a lot of uncertainty for a number of companies in terms of marginal demand, and the market hates uncertainty.

    Case in point? Nvidia (NVDA). The leading producer of graphics processing technology, the company now sees cryptocurrency mining having a smaller impact on the business as that area slows. The market likes what it sees as a result, with a number of analysts getting bullish as the company’s operating picture clears up.

    Shares of the tech giant just hit a new 52-week high after a slight September selloff. Shares are up 70 percent over the past year, with room to run further.

    Action to take: Investors may like shares as a long-term holding, although the stock yields a paltry dividend yield just under 0.1 percent.

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  • Traders may like the June $275 calls. Last going for about $12.65, the options are leveraged for a further move higher in shares. There’s a good chance the stock could move high enough for the options to trade in-the-money in the coming months, likely leading to mid-to-high double-digit gains on shares.

     

    Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.