NVIDIA's revenue doubles, beating expectations; is the AI trade narrative making a comeback?

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[Investor Story] Invested in NVIDIA for 10 years, reaping a 220-fold gain as net worth soared past ten million! The AI stock-picking principles behind a seasoned investment educator!

Bought NVIDIA in 2014 at an average cost of about $1; now enjoying a 220-fold return with personal profits exceeding eight figures in HKD.—What did this investment educator see back then? How to use options for "precise speculation" during earnings seasons? After the major shakeup in the AI sector, which directions are most worth watching?

In this episode of [Investor Story], we have invited Mr. Zhu (Zhu Jinmin), who has 13 years of experience in investment education.@大家好我係朱sirHe shares his legendary investment journey in NVIDIA based on his "faith in computing power," as well as practical strategies for trading options during earnings periods!

Friendly reminder: This article is quite long. We recommend liking and saving it before reading carefully. There are surprises in the interactive section at the end.

I. Decoding Multiple Identities: 13-Year Educator × Licensed Fund Manager × Financial Media Personality

Q: Mr. Zhu, could you please introduce your background?

Mr. Zhu: I currently hold several roles. First, I have about 13 years of experience in investment education, focusing mainly on US stocks and options in recent years. Second, I am a licensed fund manager, which allows me to share practical experience in US stocks and options from an institutional investor's perspective. Third, I am a long-term partner and resident guest on新城財經台 (New City Finance Radio).

2. A Decade of Investing in NVIDIA: From $1 to a 220x Return, Net Worth Surges by Eight Figures

Q: What has been the most profitable investment of your life?

Mr. Zhu: Without a doubt, it is $NVIDIA (NVDA.US)$ 。

This stock not only changed the trajectory of my personal wealth but also represents a journey most witnessed by my community of followers.I started paying attention to and buying it in 2014. After accumulating shares at an average price over several years, my overall average cost came out to approximately $1. Compared to the current stock price of around $220, this represents roughly a 220-fold return, with total gains now exceeding eight figures in HKD.

At that time, AI had not yet emerged, but I was infinitely fascinated—almost to the point of obsession—by one statement: "Before humanity goes extinct, the demand for computing power is infinite."In 2014, Intel was the market leader. However, careful research revealed that Intel was showing signs of fatigue and arrogance. In contrast, while NVIDIA's GPU performance was primarily used for gaming at the time, a deeper dive into its products showed that it offered an ideal solution for future computing power demands. After weighing the options, I decided to place my bets on the up-and-coming NVIDIA. Over the following years, my observations only confirmed that my intuition was correct!

Of course, I must also admit—The sudden emergence of AI at the end of 2022 significantly accelerated NVIDIA's upward momentum.

Without the unexpected rise of AI, based on natural growth rates, it might have taken until 2028 to reach new highs. Therefore, the advent of AI indeed greatly accelerated the realization of returns. In addition to my pre-positioning strategy, the sudden positive changes in the world were also a huge help to me.

Q: During the ten-year long-term holding period, what was the biggest challenge? What insights do you have?

Mr. Zhu: To be honest, the process was extremely difficult, with significant temptation and pressure along the way. In 2022, before the AI boom, NVIDIA reached a P/E ratio of around 90x, but I did not sell. Subsequently, the stock price plummeted by 75%.

From a practical trading perspective, here are a few insights to share:

First, no one knows where the peak is, and interim corrections are hard to predict. Therefore, I believe it is necessary to reduce your position by a certain amount after the stock price rises to a high level, until your cost basis is reduced to zero or below.I reduced my position by about half at approximately $90 and $130 respectively, locking in profits and achieving a zero-cost position. This allows me to hold for the long term with peace of mind.

Second, successful cases of long-term stock holding suffer from significant survivorship bias.If you hold a stock for many years, the outcome is usually either a large gain or a large loss, and unfortunately, the probability of a large loss is far higher than that of a large gain.

So, don't force yourself to hunt for 10x or 100x stocks. There are many paths to success. If you feel suited for long-term value investing, go in that direction; if you think short-term trading fits you better, take that route. No need to force it.

3. Options Trading During Earnings Season: High-Probability Strategies Using Long Calls and Precision Hedging

Q: You have been deeply involved in options trading for many years. Could you share your most frequently used options strategies and some recent real-world case studies?

Mr. Zhu: In actual trading, I tend to avoid overly complex options combinations, such as bull call spreads, bear put spreads, or iron condors. I mainly rely on two core strategies:

(1) Single-leg Long Call paired with a hedging strategy:Buy a Long Call on the target stock while simultaneously using other instruments to hedge and diversify risk. Hedging is a sophisticated discipline. For example, this year, amid black swan events like geopolitical conflicts and liquidity imbalances in South Korea, it was difficult to manage unhedged directional positions calmly.

The choice of hedging instruments varies depending on the timing and market conditions.Hedging tools can include index hedges, cross-hedges (using another stock), inverse ETFs, or even Long Puts on the same stock. One must make flexible judgments based on current market conditions while also considering the mathematical calculations for hedge ratios.

Futu'soptions chain feature offers a visual interface to view changes in open interest for each contract (increases in long or short positions).It is extremely useful for us short-term options traders. Assessing risk helps me decide whether to go bearish or bullish. Most brokerages don't provide this kind of data. These options features save me a lot of time and are really convenient.

Additionally,The options combination strategy features are quite comprehensive.For example, I can directly set up bull call spreads, bear put spreads, or iron condors using templates. The entire combination is automatically configured for one-click order placement. With an iron condor having four legs, there's no need to place separate orders.

(2) Options trading during earnings season:Many people feel thatbetting during earnings seasonis like gambling, but I believe that when you can judge the correct direction and estimate a stock's volatility rate, combined with a suitable options strategy, you will find thatthe risk is defined: at most, you lose the entire option premium,while if the direction is correct, you can earn one, two, three, or even ten times your investment. Over the long term, the overall win rate is actually quite substantial.

During the recent earnings season, I have frequently used Futu'sEarnings Calendar Feature, this feature offers two key advantages:

① Clear and easy-to-read layout, clearly marking earnings announcements released before and after market hours for each stock (confusing pre-market and post-market results can lead to total losses on option positions);

② More importantly, the majority of stocks come with earnings forecast data, including market consensus expectations for revenue and profits.For those trading options during earnings season, this saves us a significant amount of time digging through data. By simply comparing expected figures with the stock's current high and low prices, we can quickly decide whether to place an order, and whether to go long or short.

I have executed many Long Call trades, such as $Super Micro Computer (SMCI.US)$ , which surged by 10-20% after the earnings report, yielding several times the profit on the Long Calls.

4. Stock Selection Logic and Three Major Future Opportunities After the Major Volatility in the AI Sector

Q: AI stocks have seen a significant pullback recently. How should we view this correction?

Mr. Zhu:Following the sharp decline in AI stocks, the strength of the rebound varies for each stock, with valuation being the core reason.

Take NVIDIA as an example. It was able to lead the rebound after the major drop in the AI sector because its valuation has never been expensive. During the AI sector's massive rally, it did not surge aggressively; instead, investment banks have been raising their earnings forecasts every quarter, bringing its forward P/E ratio down to below 20x, near a ten-year statistical low. Thanks to this valuation floor, NVIDIA has remained largely unscathed during recent volatile market movements.

In contrast, $KLA Corp (KLAC.US)$ 、 $Applied Materials (AMAT.US)$ 、 $Arm Holdings (ARM.US)$ 、 $Seagate Technology (STX.US)$ They fell sharply but saw limited rebound,The core reason is that despite upward revisions to earnings forecasts, their valuations remain elevatedand are difficult to justify. Especially in an environment where 30-year US Treasury yields are high, rising risk-free rates inflict the most damage on high-valuation growth stocks. At such times, paying close attention to valuation is not old-fashioned, but a necessary measure for self-preservation.

Second, from a long-term perspective, the ultimate fate of the AI sector depends on whether downstream applications can truly generate profits.

"Shovel sellers" (computing power infrastructure, i.e., shovel stocks) have always been the biggest earners, capturing the majority of capital expenditure from the four major cloud providers ( $Microsoft (MSFT.US)$ 、 $Amazon (AMZN.US)$ 、 $Alphabet-A (GOOGL.US)$ 、 $Meta Platforms (META.US)$ ). However, if downstream applications fail to monetize, upstream capital expenditure will inevitably slow down, ultimately putting pressure on NVIDIA as well.From now on, investors need to start focusing on whether truly successful business cases are emerging among downstream AI applications.

Q: Are you still bullish on the AI sector? Which other sectors do you favor for the future?

Mr. Zhu: Looking ahead, I am bullish on the following three major directions:

① The AI sector still requires long-term allocation.History tells us that even if a tech bubble bursts (such as the 2000 crash, $Cisco (CSCO.US)$ where fiber optic stocks plummeted by over 90%), the surviving industry leaders, having weathered the storm, can still deliver returns of tens of times. $Corning (GLW.US)$ In fact, recent highs have been reached, so it is not advisable to completely avoid the sector due to short-term volatility. Whether AI continues to prosper or reenacts the 2000 bubble burst, investment opportunities can be found in both extreme scenarios.

② Biotechnology and Healthcare Sector:Recently, $Moderna (MRNA.US)$ and $Merck & Co (MRK.US)$ released impressive Phase III clinical trial data for the world's first mRNA treatment targeting melanoma (a malignant cancer that is extremely difficult to treat), which is highly significant. The stock recorded its largest single-day gain in history, surging 150%, and also drove up a batch of healthcare stocks.

This strongly suggests that AI is significantly accelerating the success rate and speed of drug development. With the emergence of AI, the likelihood of witnessing more medical breakthroughs within our limited lifespans has greatly increased. Therefore, I believe the healthcare sector warrants long-term positioning. Healthcare ETFs are a prudent choice for gradual entry, and I have consistently recommended that everyone keep an eye on $The Health Care Select Sector SPDR® Fund (XLV.US)$

③ Leaders in the Consumer Sector:Under the pressure of the midterm elections, I believe the current geopolitical conflict is nearing its end. If tensions gradually ease, leading to a decline in oil prices and inflation, consumer stocks that have been under long-term pressure will finally get a breather. High-quality $Coca-Cola (KO.US)$ , those whose stock prices have already dropped by 20 percentage points, $Walmart (WMT.US)$ , and even those that have been consistently suppressed, $McDonald's (MCD.US)$ and other leading consumer giants are poised for a valuation recovery rally.

5. Large Capital vs. Small Capital: Insights from Managing HK$2.7 Billion

Q: You have managed over HK$2.7 billion in assets. What are the differences in investment logic between large and small capital?

The advantage of large capital lies in the ability to conduct systematic market testing, accumulate positions in stages, and allocate funds across different instruments—such as underlying stocks, Hong Kong and US IPOs (including direct allocations as an international placer), and options. This allows large capital to access diverse sectors and achieve better diversification, which significantly contributes to the stable growth of the overall portfolio.

However, due to regulatory constraints and scale, you cannot concentrate all your capital into a single stock as small capital might. From a "winner-takes-all" perspective, large capital rarely engages in all-or-nothing bets where the outcome is determined by a single trade, nor does it frequently generate the explosive excess returns often seen with smaller capital.

In contrast, with small capital, as mentioned in my earlier example, if you concentrate on just two stocks, the outcome is binary: either you lose everything and dare not speak of it again, or you win big and celebrate loudly. This highlights the key difference between small and large capital strategies.

From a long-term perspective, I favor an investment approach focused on stable, long-term compound interest.Since 1969, Warren Buffett has achieved an average annual compound return of approximately 22% to 24%, which may not sound particularly impressive. However, this steady compounding turned Berkshire Hathaway's share price from around $9 in 1969 to approximately $750,000 today, cementing his status as one of the world's wealthiest individuals. This is the power of consistent compound growth. Therefore, between the steady upward trajectory of large capital and the fleeting dream of getting rich quick with small capital, I would definitely choose the former over the latter.

6. Experiencing the 2008 Financial Crisis Firsthand—Spotting Extraordinary Opportunities Amidst the Crisis

Q: You personally experienced both the 2008 financial crisis and the 2024 liquidity crisis in Japan. What was your logical framework for judgment at those times?

Mr. Zhu: The 2008 crash was the closest I have ever seen to a "doomsday" scenario in the stock market.

During the 2008 financial crisis, the collapse of Lehman Brothers caused a complete freeze in liquidity among investment banks. To raise cash, the market sold off every asset that could be liquidated. Below are the stocks I witnessed firsthand:

① $CNBM (03323.HK)$ Plummeted from 38 yuan to below 1.5 yuan

② $TECHTRONIC IND (00669.HK)$ : Fell from around HK$25 to HK$1—later rising back to HK$100

③ $ND PAPER (02689.HK)$ : Plunged from over HK$20 to just HK$0.70

④ $HKEX (00388.HK)$ : Dropped from HK$250 to HK$45

All technical analysis became completely ineffective, and faith in valuation briefly collapsed. Stocks trading at 6x P/E fell to 4x, and those at 4x fell to 2x, as the market was entirely dominated by the liquidity crisis. However, after the crisis passed, the decline in many companies' earnings was far smaller than the drop in their stock prices—stocks might have fallen 90%, while earnings only retreated by 20%. Once the market realized it had overreacted, the rebound was rocket-fast. The Hang Seng Index rose from its low of approximately 10,676 points in 2009 to around 20,000 points within a year, nearly doubling.

The most profound lesson from this experience: "When a once-in-a-lifetime buying opportunity arises, the window is extremely short. The market has no obligation to wait three years for you to slowly accumulate positions. Seize low prices when they appear."Those fortunate enough to have lived through 2008 have since developed much greater mental resilience in the face of various shocks such as the European debt crisis, trade wars, and the COVID-19 pandemic, simply because those events are not comparable in magnitude.

South Korea's liquidity crisis this year is exactly like Japan's liquidity imbalance in 2024: US stocks were briefly dragged down by Asian regional liquidity risks, but it was quickly proven to have nothing to do with the US fundamentals, yet high-quality US stocks were unfairly implicated in the sell-off. Institutional capital often replenishes its positions at a surprisingly fast pace.

This logic offers two key insights for investors:

① US stocks experience at least one "intermediate correction wave" every year. A dip provides an opportunity to pick up bargains, which is essentially the market "giving away money" to investors.

② If the decline in US stocks is driven by Asian liquidity issues, it represents a once-in-a-lifetime buying opportunity that must be seized.Recently, certain healthcare and tech stocks adjusted without clear fundamental reasons and then quickly broke out to new highs, illustrating the same principle.

I have conducted research on both Japanese and South Korean stocks. Previously, I needed to trade them through brokers like IB (Interactive Brokers), but now Futu also supportstrading Japanese and South Korean stocks.I previously bought shares of Japan's five major trading houses on Futu and made some profits, and recently I also bought $SK Hynix (000660.KR)$ and made a profit—no need to chase high-premium Hong Kong stock ETFs anymore $CSOP SK Hynix Daily Max (2x) Leveraged Product (07709.HK)$ , but instead hold authentic Korean stocks directly, which offers a completely different experience. This is a significant contribution to investors.

7. Investment Insights: Appreciate Your Blessings While You Have Them

Finally, I want to say sincerely: The greatest happiness in life is living in an era with a mature, fair, open, and just securities and options market. In Hong Kong, you can freely go long or short, collect option premiums through options, and employ ever-changing strategies. With a fully featured brokerage platform like Futu, you now have access to tools that were once available only to top institutional investors. I, Mr. Zhu, am deeply grateful for stocks and options throughout my life. Without stocks, there would be no returns from NVIDIA, no investment school of my own, no fund of my own, and not the relatively ideal life I enjoy today. Please cherish all that you have; appreciate your blessings while you are in the midst of them.

I hope every fellow investor will cherish this era, this market, and the best tools at their disposal.

Thank you@大家好我係朱sirWith the dual perspective of a teacher with 13 years of experience and a fund manager with 7 years of experience, let’s walk through this epic journey—from the prophetic belief in "infinite demand for computing power" to NVIDIA's 220x return! Whether it’s the high-win-rate strategy for earnings-period options or the contrarian bottom-fishing philosophy after the 2008 financial crisis, they all stem from the same core: adhering to strict risk management on the right long-term direction and patiently compounding growth. May every fellow investor find their own path to wealth in this most rewarding era of investing!

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Disclaimer: This content is based on an interview with@大家好我係朱sirexposed to@牛友有料到and the images in this article were provided by@大家好我係朱sirProvided and authorized for use. The cases in this article are for reference only and do not constitute any investment advice; the information in this article does not constitute any industry or indicator recommendations. The stock-specific information and introductions involved represent only the personal opinions of the user and do not constitute any stock recommendations. Past performance of individual stocks does not guarantee future results. The stock market involves risks, so please invest with caution.

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