NVIDIA's pullback sparks $67 million in bullish bets ahead of CPI data release | Smart Money Options

On Tuesday, the artificial intelligence infrastructure sector came under renewed pressure as investors continued to digest the impact of stronger-than-expected U.S. jobs data. $Nasdaq Composite Index (.IXIC.US)$ fell more than 2% intraday, while $PHLX Semiconductor Index (.SOX.US)$ plunged more than 8% at one point during the session.

AI-related stocks broadly declined. As of this writing, $Micron Technology (MU.US)$ dropping more than 6%, $Marvell Technology (MRVL.US)$ has dropped more than 11%, $Qualcomm (QCOM.US)$ fell more than 8%, $Advanced Micro Devices (AMD.US)$ dropped over 6%, while $Intel (INTC.US)$ declined more than 5%. Meanwhile, investors are awaiting the release of the U.S. May CPI reportconcerned that persistently high inflation could further delay the Federal Reserve's rate cuts and continue to pressure richly valued tech stocks.

However, despite the sharp sell-off in semiconductor stocks, $NVIDIA (NVDA.US)$ the options market for NVIDIA saw a notable institutional bullish bet.

According to options flow data, a trader purchased in two large blocks NVIDIA $220 call options expiring on October 16, 2026. The first trade involved 10,000 contracts, followed by a second purchase adding 34,990 contracts, with both trades executed at approximately $14.80 per contract.

The trader bought a total of 44,990 call option contracts, amounting to a premium payment of approximately $66.65 million in premiums.

Notably, prior to these trades, the contract’s open interest stood at just 6,980 contracts, while volume had already approached 45,000 contracts. This suggests the trading activity was likely driven by new institutional positions rather than closing or transferring existing ones.

Based on the premium paid, the position’s breakeven price is approximately $234.80, indicating the trader is betting NVIDIA will rise more than 15% over the coming months.

The October expiration date is also noteworthy. This position spans NVIDIA’s upcoming quarterly earnings announcement, the ongoing rollout of its Blackwell platform, accelerating demand for AI servers, and sustained capital expenditure by hyperscale cloud providers. In other words, the trader does not appear to be betting on a short-term rebound, but rather on the continued expansion of the AI infrastructure investment cycle.

Perhaps even more interesting is the timing of the trade. The position was established just ahead of the May CPI report—one of the market’s most closely watched macroeconomic events. Although investors remain focused on inflation and interest rate risks, this trader committed over $66 million to establish a bullish position on NVIDIA before the data release, demonstrating confidence in the company’s medium-term outlook..

It’s worth noting that this is not the first large bullish options trade on NVIDIA recently. During last week’s semiconductor selloff, traders established a bullish call spread involving more than 31,000 contracts, betting on further upside in NVIDIA’s share price. Similar large bullish positions have also recently appeared in $Microsoft (MSFT.US)$ , $Alphabet-C (GOOG.US)$as well as$Taiwan Semiconductor (TSM.US)$ options.

For investors, the key takeaway may lie not in the strike price itself, but in the timing of the trade. At the time, the semiconductor sector was experiencing one of its steepest declines in months, with markets still concerned about inflation and persistently high interest rates, yet institutional capital continued to accumulate upside exposure..

If demand for artificial intelligence, capital expenditures by hyperscale cloud providers, and deployment trends related to Blackwell remain robust, the recent pullback may not reflect deteriorating fundamentals but rather a rebalancing of positions. With a surge of bullish options bets continuing to emerge, NVIDIA’s next move could serve as a key barometer for whether the AI trade is poised to regain momentum.

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