Nvidia Is Still Cheap Ahead of Earnings Next Week - Put Premiums are High and Worth Shorting

Nvidia Inc (NVDA) stock still looks undervalued based on its powerful free cash flow and FCF margins. The company will release its earnings next Wednesday, May 22, for its fiscal Q1 2025 ending April 30. As a result, its put option premiums are now very high from speculators that expect NVDA to fall. That makes shorting out-of-the-money (OTM) puts attractive as an income play, especially for existing investors in the stock.

NVDA is trading at $908.34 in midday trading on Tuesday, May 14. However, the stock could still be undervalued here. I discussed this in my last Barchart article on April 21, 2024, “Nvidia Stock Looks Too Cheap Here - Put Premiums are Very High and Worth Shorting.”