Investors sold a large amount of $NVIDIA (NVDA.US)$ call Options after the stock hit a record high for the first time since last November. Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, stated that during Regular Trading Hours, approximately 0.2 million call Options expiring on January 17 with a strike price of $140 were essentially sold, along with 0.6 million to 0.7 million call Options expiring on February 21 with strike prices ranging from $159 to $165.

The company previously announced a wide range of new products but failed to elevate this AI chip manufacturer to new heights. NVIDIA CEO Jensen Huang will deliver a speech at the International Consumer Electronics Show (CES) in Las Vegas on Monday evening, where a series of new products will be launched. In the days leading up to this, there was a significant amount of Call buying for the company, but the sell-off seems to be reversing this trend. NVIDIA's stock price closed down 6.2% on Tuesday at $140.14, erasing a 3.4% gain from Monday, marking the largest single-day drop in four months.

NVIDIA's trading prices have returned to the levels seen last Thursday, Murphy noted: "The Call Options for February that we emphasized last Friday and Monday are being sold off significantly, as are the Call Options for January which expire with a strike price around $140."

Analysis pointed out that, despite NVIDIA's recent announcement which made investors optimistic about the company's long-term prospects, the short-term upside is not as significant as some investors seek.$Stifel Financial Corp 5.2% Sr Notes Due 15/10/2047 Usd25 (SFB.US)$The report stated that the news released by NVIDIA is significant, but it is long-term. There are also comments that Jensen Huang provided relatively few details about the company's most profitable business - the chips used for training and running AI models, only noting that its Blackwell AI processor has been fully put into production.

As of the time of writing, the total Volume of Options reached 6.73 million contracts, the highest since November 21. The change in implied volatility of February Options highlighted the sell-off, with Call Options trading at a discount compared to bearish Put Options, whereas the two were generally consistent on Monday.

Brent Kochuba, the founder of SpotGamma, stated: “The skew of NVIDIA's stock price rose significantly yesterday, indicating that bullish options were indeed being bought heavily in the early session, which means that people are actively buying Call options. Then we saw the most severe sell-off in at least the past 30 days.”

Jensen Huang showcased multiple new products at the 'Technology Spring Festival', showcasing ambitious AI strategic goals.

On Monday, at the stage in Las Vegas, Jensen Huang delivered a keynote speech at the International Consumer Electronics Show (CES), known as the 'Technology Spring Festival'. He presented a new lineup and shared his vision of how AI would spread throughout the economy. The company aims for its products to be at the core of the future tech world—targeting 1 billion personal humanoid robots, 10 million automated factories, and 1.5 billion self-driving cars and trucks.

As companies compete to deploy new AI computing devices, there is great interest in NVIDIA's products and Jensen Huang's predictions. In his more than 90-minute speech, he introduced NVIDIA's products and strategy, including collaborations with$Toyota Motor (TM.US)$and MediaTek.

Before the drop on Tuesday, NVIDIA's stock price had more than doubled in the past 12 months. During this period, Asian chip suppliers, including $Taiwan Semiconductor (TSM.US)$and Foxconn's parent company Hon Hai Precision, also soared due to the optimistic sentiment surrounding NVIDIA's prospects.

NVIDIA's Chief Financial Officer, Colette Kress, stated at another event that the AI transformation will continue to drive growth in the next decade. On Tuesday, she mentioned in a talk with JPMorgan: “It will accompany us for the next 10 years and even longer. We still have many growth opportunities ahead.

• AI gaming chips

During his speech on Monday, Jensen Huang announced a series of new products, including a new type of GeForce GPU for gaming computers. NVIDIA stated that the new GeForce 50 series graphics cards, based on Blackwell, will create a more realistic experience for computer gamers. Traditional graphics chips build images by computing the shadows of each pixel, while the new technology will rely more on AI to predict the next frame of the image.

The flagship RTX 5090 model will launch later this month with a price of $1999, followed by a slightly lower-performing graphics card. The RTX 5070, priced at $549, will be released in February and outperforms the previous generation's top model, the RTX 4090. NVIDIA stated that laptops using this chip will also have longer battery life. The company also indicated that high-performance desktop users will not have to compromise between a more responsive gaming experience and a more realistic gaming experience.

Just in 2022, gaming was NVIDIA's largest source of sales. Now, the chip manufacturer's datacenter business has grown much larger. Due to the popularity of the company’s accelerator chips among the world's largest technology companies, the datacenter business is expected to contribute over $100 billion this year. NVIDIA's next step is to introduce hardware and software to more enterprises and government institutions for revenue diversification.

• Autonomous driving

Jensen Huang announced that Toyota Motor, the world's largest Auto Manufacturer, is now a customer of NVIDIA's Autonomous Driving AI products and will use its Drive chips and Software. NVIDIA will collaborate with $Toyota Motor (7203.JP)$to develop the next generation of autonomous vehicles, and NVIDIA's Automotive Business is expected to expand to 5 billion USD by FY2026. Jensen Huang stated that this field is the next market that could scale to trillions of dollars.

Jensen Huang stated that Drive OS has become the first certified programmable AI computing functional safety Software, achieving the highest automotive safety standard ASIL-D. Huang also announced the manufacturers with whom NVIDIA is collaborating in the Automotive sector, including domestic automakers like BYD. $BYD COMPANY (01211.HK)$ 、 $LI AUTO-W (02015.HK)$ 、 $XIAOMI-W (01810.HK)$ 、$ZEEKR (ZK.US)$。

NVIDIA stated that expanding AI into more physical worlds will transform industries valued at $50 trillion. However, this move will also present challenges. Siasun Robot&Automation and Autos will need software that can safely manage the complexities of real life. Jensen Huang mentioned that NVIDIA created Cosmos to help robots become smarter and produce fully autonomous vehicles.

Cosmos technology can create videos from inputs such as text. Subsequently, the video serves as the foundation for virtual training, which helps reduce reliance on expensive and time-consuming real-world experiments. The generated videos can be searched and refined for repeated testing of important but rare events, such as a car encountering an emergency vehicle.

NVIDIA is also collaborating with$Uber Technologies (UBER.US)$Collaborate on developing autonomous driving technology. The millions of rides processed by Uber Technologies every day will provide a wealth of data for training AI models.

NVIDIA stated that mass-market Auto Manufacturers will shift to using a single computer and operating system across all models, rather than systems divided by vehicle categories. The company believes that this shift will lay the groundwork for broader adoption of the chip design company's comprehensive products. To speed up this process, NVIDIA has already secured certification for its products from government transportation safety organizations.

• AI supercomputer

Jensen Huang also revealed that NVIDIA is developing the world's smallest AI supercomputer. He stated that NVIDIA is working on a project named "Project Digits," which features NVIDIA's super chip GB10. The super chip GB10 that NVIDIA has equipped for the $3,000 Project Digits is a combination of a central processing unit and graphic semiconductors—boasting large memory and fast connectivity. The idea is to provide developers with hardware that can run very large AI models, which current laptops struggle to handle.

This new machine developed in collaboration with MediaTek will run a version of the Linux operating system and is not designed for everyday use. Instead, it is intended to help AI developers work locally when connecting to the cloud or using traditional computers is not practical or possible.

NVIDIA chose MediaTek to help manufacture the main chip for Digits because of MediaTek's expertise in manufacturing low-power semiconductors. When asked if Project Digits marks NVIDIA's desire to more broadly enter the personal computer market, Jensen Huang stated that this machine is designed for AI developers and students. However, he also hinted that NVIDIA has a greater interest in the industry.

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