Nvidia is pushing hard to grow its reach in Japan. CEO Jensen Huang announced a set of partnerships to help Japanese firms build systems fit to the country's language, industries, and workers. The company is teaming with Toyota on next-generation AI-powered vehicles and with Mitsubishi to build advanced cooling and the infrastructure that big AI data centers need. Nvidia also plans what it calls the world's first national AI factory built for physical AI, supporting robotics, self-running machines, and other uses. The pattern shows Nvidia moving past just selling chips toward becoming the backbone of the global AI ecosystem.
The stock did not treat this news as a positive spark. It fell over 2.5% on the day, part of broad pressure on chips, with the Philadelphia Semiconductor Index down.
The bull case
Taiwan Semiconductor's earnings and its raised capital-spending plan should build confidence in Nvidia. The Vera Rubin chip, due at the end of the year, will bring both GPUs and CPUs. New deals keep arriving daily as Huang widens Nvidia's footprint across industries and companies. I see this as a strong buying chance, though I can't say when or from what price. Earnings land August 26th, and the next month should be interesting as Nvidia starts talking about Vera Rubin and its new deals. The stock is just catching its breath. It traded at $235 not long ago.
The bear case
Huang's tour of Japan included a key partnership using the Vera Rubin CPU chip. Nvidia's shares may be capped because the industry is shifting from training models to inference, raising the question of where Nvidia sits in that mix. Nvidia is expanding and innovating to compete on the inference side while still owning about 90% of the GPU market. It keeps broadening its full stack and its CUDA reach so it can serve every customer for everything.
The worry: Nvidia is still focused on GPU sales, which will eventually roll over. Competition is building on the TPU side, with Google's parent Alphabet and Amazon trying to make their own chips using Broadcom. Many investors doubt Nvidia can keep this pace. The stock has lost a little shine because it hasn't ramped its CPU side and its push into inference the way some other big tech firms have. Still, Nvidia grew 85% last quarter year over year and expects that to continue. Huang strongly backs the company's growth rate, yet the stock hasn't reacted the way some other names have.
Bullish example trade: call diagonal
A diagonal spread sits in the calendar-spread family and collects value daily, because you buy longer-dated implied volatility and sell shorter-dated implied volatility. The setup: buy the August 7th 210 call and, against it, sell the July 24th 220 call. That makes a bullish $10-wide call diagonal. The August 7th options run two weeks out; the July 24th options expire in eight days. The 210 call sits about four dollars out of the money to the upside.
The debit was about $6.70 and is now trading just below $6 after the pullback. That debit is your risk, and you're paying less than the width of the spread. You make the most money at or near the 220 strike you sold. You need some upside: with roughly a $6 debit, anything above about 213 to 214 turns a profit. The needed move, on a percentage basis, isn't big. Because it's a two-week spread, you can extend duration. You can roll or adjust the short 220 call on the July 24th weekly into another weekly or intra-weekly series to create credits, which lowers your risk and raises potential profit. You can adjust the strikes if you want.
Bearish example trade: short call vertical
A more passive, neutral-to-bearish approach uses the July 31st weekly options, about two weeks to expiration. Sell the out-of-the-money 215 call and buy the 220 call, making a short $5-wide call vertical. You collect a credit of about $1.30, maybe a little more since it's trading higher. If you collect $1.30, that's the most you can make: $130 per spread, with $370 in risk. Full profit needs the stock above 220. The break-even is 216.30 on the upside. This gives a higher chance of success but more risk than the potential reward, the usual trade-off.
The stock recently topped out around 213 to 214. If it returns to that area, it stays below the 216.30 break-even, so the trade still works. This one is more passive with better odds.
Comparing the two
Earnings hit August 26th, after both trades. The short July 31st call vertical is profitable if nothing happens; if the stock stays put between now and July 31st, it wins. The short vertical is profitable in three of four scenarios. The call diagonal is not profitable if nothing happens; it needs an upside move. That's the core difference between owning spreads and being short spreads: what happens when nothing happens. The short vertical profits; the long diagonal doesn't.
