Since Monday, we have started exploring the stocks and options of semiconductor players that are likely to emerge as winners when the Internet of Everything goes mainstream. On Monday we examined Skyworks Solutions, we examined Nuance Communications on Tuesday and we examined Texas Instruments yesterday.
I would very much like to explore the possibilities in Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL) today but for lack of sufficient Open Interest in its options. AOS is a small cap (with a market valuation of $231M) that designs, develops and supplies a range of power semiconductors globally.
The company’s share price has gained 20.87% in the last one month, it has made 15 new highs in the same period and its share price is above its 50 and 200-day moving averages. The company has a spate of analysts’ upward revisions and a Number 2 (Buy) Zacks rank confirms the bullishness of this company. AOS is attractive at the trading price $8.84 apiece and you may want to buy the stock of this company for ownership or covered calls if the volume of the open interest in its options remains unattractive.
Another Optionable Semiconductor Player to Consider
NVIDIA Corporation (NASDAQ:NVDA) is another semiconductor player that is a potential winner in the Internet of Everything landscape. NVIDIA with its market cap of $10.81B is engaged in creating the graphics chips used in personal computers (PCs). The Company operates in three segments: graphics processing unit (GPU) Business, professional solutions business (PSB) and consumer products business (CPB). Its mobile processors are used in cell phones, tablets and auto infotainment systems. Diehard options traders will see NVIDIA as a better alternative to AOS because of the relatively bigger size of the company and the interest in its options.
Surge in Recent Times
The stock chart above shows how shares of NVIDIA have traded in the last one year. The share price of NVIDIA has gained 3.8% from June 4 to date; the stock has gained 8.3% in the last one month, 23.9% in the year-to-date and 42.17% in the last one year.
Link to the Internet of Everything
NVIDIA, while primarily known has a maker of GPU architecture for smartphones, tablets, computers and game consoles, is also fully involved in developing GPU architecture for auto infotainment systems. Hence, as the automobile becomes keyless, handless, driverless and more digitalized at the coming of age of the IoE, NVIDIA is setting itself up to be at the forefront of the infotainment system in the automobiles of tomorrow.
The enormous power packed into the company’s new Tegra K1 chip is expected to make the infotainment center in automobiles safer by allowing the driver to glance at the screen once. This one-stop shop is made possible because delays are eliminated by the computing power of the chip. More so, NVIDIA has overlay the chip with voice control and natural language processing capability to increase the level of safety and control in the new generation of automobiles.
How to Trade NVDA Options
NVIDIA is one of the few companies that do not need to wait until tomorrow before it starts to record gains on its entrance into the Internet of Everything landscape. The company is already forging alliances with automobile manufacturers as new layers of connectivity are added to every new generation of automobiles that they unveil. I am bullish on NVIDIA and I recommend the NVDA Jan 2015 21.000 call (NVDA150117C00021000).
— Daily Option Alerts