Options Trades in CME & MRVL as NVDA Lifts Tech Sector

we got after the close yesterday. That's Jenny Horne co-host of Next Gen investing. I do want to broaden things out though. Bring in Tony Zhang, chief strategist over at Options Play. Tony great to have you back on the show here. I mean let's talk in video. We got Nvidia. We got great numbers which were expected here. And they have bucked the trend of trading lower in six of the last eight quarters. We are up about 8%. How are you looking at the market action in the wake of Nvidia's report? Yeah. So obviously there was a lot of weight behind whether or not Nvidia was going to continue the strong guidance that they've continued. And not only have they given us strong guidance and raise guidance, they've kind of given us guidance all the way through 2028. And that's really what markets reacted very positively to because initially on the beat, the stock was down a couple of percent until that guidance number came out. And that's really what drove that six, 7% after hours rally. And then that's what we're seeing eight up, 8% here today. It's turned around the entire technology sector. If you look at, you know, whether technology was outperforming, underperforming heading into Nvidia, we were actually underperforming the S&P 500. And what's interesting is that even up into the Nvidia print, you had software stocks that were relatively strong here over the last couple of months start to show some weakness here as well. A dragging kind of that technology sector lower along with semis. But now that with the Nvidia print last night we are actually seeing a broad based rally here across the board for technology alongside with financials that have lagged behind here as well. Starting to show strength. So we're seeing broad strength overall with the broader markets on the back of this Nvidia print. Yeah. I mean Nvidia up close to 8%. You mentioned software there. I mean we've got Salesforce up 21%. CrowdStrike making a 17 plus move to the upside here. So as you're looking at opportunities here knowing that Nvidia is sort of the the tide that lifts all boats here when it comes to the tech trade, but also a lot of the rotation that we've seen. I mean health care outperforming. We've seen financials start to outperform recently. Where are you seeing opportunity in the market Tony. Yeah. So first place I want to take a look at here is within financials. You see CME. This was a stock that was quite strong here. To start out the year took a bit of a hit here this over the last six months or so. But has recently come back to life and recently broke out above an important resistance level at 270. Not only has it broken out above 270 with with strong volume, but also relative strength, outperforming the S&P 500, showing us potential institutional accumulation of this stock heading into the $300 upside initial upside target that we have. But really, we're looking closer to around that. 333 40 highs that we saw earlier this year as our as our longer term upward objective here for CME and as interest rate futures, S&P futures, crude gold volatility futures continue to set record volumes. This is really where CME excels. And one thing that really stands out here for CME is that net profit margin six sit at 63%. There's really are very few companies with that type of profit margin. And CME is one of the few. And this is really what makes it interesting and compelling given the fact that it's only trading at 22 times forward earnings. So especially as retail participation in futures contracts and and and the interest rate derivatives continue to trade on CME. This is really what's interesting right now, especially given the amount of uncertainty around interest rates, where, you know, whether or not we're going to get a hike here in September, you know, where global interest rates are headed here, considering we're at essentially multi-decade highs across the board, both here in the US and in many other countries globally. This is really where CME products shine in in, in the volatility that we're seeing here in the markets right now. And that's why I think CME looks quite compelling at the given moment. I like what what you said about CME in the notes that you sent over. You call it the toll booth on global financial volatility. And as everyone keeps highlighting September often a time for a roller coaster ride. So a good time to take a look at CME here. You also like Marvell. And of course an important day for Marvell today. What level specifically are you looking at when it comes to Marvell. Tony. Yeah. So Marvell recently broke out above an important level at 240. Now Marvell obviously has taken a bit of a hit here along with all semis over the last few months. But as slowly recovered here over the last couple of weeks and we just continue. And despite Nvidia's blowout earnings that we saw here yesterday, we continue to see that custom silicon is really one of the one of the interesting air segments or niches within the semiconductor industry. We we over the last few months and even in the last couple of weeks have continued to see interesting deals that have been made with regards to custom silicon, especially as these hyperscalers and AI labs are focusing more and more on inference compute rather than training compute. Because Nvidia has essentially cornered the market of training compute and inference compute up until now. But over the last couple of months, like I said, we've seen deals out of meta with with Broadcom and and Marvell specifically, you know, we're seeing it on AWS. We're seeing with open AI where they're looking at custom chips specifically built for inference rather than training for their specific for the data centers that they're trying to build out. So if we look at kind of the hyperscaler build out here over the next few years, some of that is going to start shifting away from Nvidia to these custom silicon chips. And that's really where Broadcom and Marvell sit at the forefront in those in the in the space of custom silicon. And this is what's so interesting for Marvell is the fact that they essentially own that particular space, especially also the interconnect between the massive amounts of data that these centers need to move around. The interconnect is also another component that Marvell makes that sits, that is incredibly important for this CapEx expenditure that these hyperscalers have committed to over the last few over the next few years. So Marvell is also an interesting opportunity right now in the recent breakout here above. 240, I think is important to take a look at because there are upside objective here for this particular stock right now is around 290. All right. Well we'll have those Marvell earnings later today. They come out at 405 eastern. We'll have them on market on close. But looking for a breakout higher. We broke out above 240. You're looking to get us up towards 290. We'll see if they can do it. The expectations very high for Marvell going into their print this afternoon. Tony thanks for taking the time to