Here’s a Strategy for Betting on Nvidia’s Best AI Stocks Without Buying It.

Artificial intelligence may destroy humanity, but not before earning immense riches. Such is the problem that faces investors in the aftermath of Nvidia’s recent earnings release, which accidentally produced a large-scale ethics experiment on Wall Street.

On Tuesday, just days after Nvidia (NVDA) surprised investors with a financial prediction that some say heralds the start of a new Industrial Revolution, AI specialists issued a warning.

“Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war,” according to a statement released by the Center for AI Safety signed by many in the field.

So yet, the warning has had minimal impact on investors.

The best AI stocks of Nvidia, which manufactures semiconductor chips needed to fuel AI, have continued to rise. The hype around AI is so high that Nvidia’s stock’s exorbitant value appears unimportant. Some analysts and investors are even crediting the quick development of AI with saving the general market from being driven down by fears of a probable recession, the debt-ceiling problem, and other gloomy hobgoblins.

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Nvidia, how hot is it? The next gold rush appears to be upon us, and Nvidia is selling all of the picks and shovels.” many investors use terminology rarely used in traditionally sedate financial circles when discussing the stock and AI. Susquehanna Financial Group’s semiconductor analyst, Christopher Rolland, told investors in a recent note that Nvidia’s earnings release was “an unfathomable beat as generative AI and accelerated computing inflect.”

Nvidia’s stock has risen 174% this year. The stock chart shows exceptional trade volumes and such strong upward speed that it appears that the laws of gravity — and markets — do not apply.

While such setups often inspire negative trading techniques that profit from a stock decrease, Nvidia may be an exception, at least for now.

The current key market argument is about the best strategy to leverage Nvidia stock other than full ownership. In the options market, many investors are choosing to rent it. Call options, which grow in value as the price of a stock rises, cost a fraction of the stock price and allow investors to risk less money pursuing a hot stock.

Aggressive investors looking to profit from Nvidia’s climb may explore a call spread, which involves purchasing one call and selling another to profit from a rise in the stock price. Many expert traders use the technique since the potential rewards are considerable while the amount of money invested is smaller than that of merely buying a call.

With best AI stocks Nvidia stock currently trading at $401.11, the July $415 call could be purchased for around $24, and the July $475 call could be sold for around $8. If Nvidia is trading at $475 when the spread expires, the spread is worth a maximum profit of $60. The spread sets you back $16.

Any stock that has risen as swiftly and fiercely as Nvidia has in the last week nearly usually falls victim to its own momentum. After a period, nearly everyone who wants to buy the stock has done so, and there is little money remaining to drive up the price. The potential return is appealing, but the method has no guarantees other than tremendous risk.

Should Nvidia go below $415, the deal will fail. To break even, the stock must rise to at least $431. Nvidia stock has varied from $108.13 to $419.38 during the last 52 weeks.