A Special Investment Strategy for the Gallium-Nitride Revolution

Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance

There’s no question… while the gallium nitride stock we’ve identified has the biggest upside potential in today’s market, Nvidia itself stands to benefit mightily from this new technology as well.

There’s a reason Nvidia chose to partner with this tiny company. It clearly sees that gallium nitride is the future of semiconductor technology. As the chip industry transitions from silicon to GaN, Nvidia is positioning itself at the forefront of this revolution.

So you might wonder: Is it still a good idea to invest in Nvidia alongside the GaN stock? After all, new gallium nitride chips could send Nvidia’s stock soaring even higher.

The answer is yes… but with an important caveat.

Get Bigger Returns Without Buying Nvidia Directly

Nvidia is already the most valuable company in the world. While I’m convinced Nvidia will continue to climb as it integrates gallium nitride technology into its next generation of chips, the upside is inherently more limited than a small-cap company.

The truth is, buying Nvidia stock directly at current valuations doesn’t provide the kind of BIG upside returns we’re targeting for our members. When a company is already worth trillions of dollars, even substantial growth translates to more modest percentage gains for shareholders.

But there is another way to invest in Nvidia that can deliver the explosive gains we want – potentially up to 400% returns over the next year if Nvidia continues its upward trajectory.

LEAPS for Leverage

As Fidelity Investment explains in their educational materials:

“LEAPS allow you to control a greater amount of shares with a smaller amount of money.”

The strategy we’re using isn’t high-risk short-term call options or some obscure Nvidia subsidiary. Instead, we’re employing a more measured approach using Long-Term Equity Anticipation Securities, commonly known as LEAPS.

LEAPS are essentially long-dated options that give you the right (but not the obligation) to purchase shares at a predetermined price, with expiration dates extending two years or more into the future. This time horizon gives you significant runway to benefit from Nvidia’s growth as the gallium nitride revolution unfolds.

Three Reasons This Strategy Works

The beauty of this approach is threefold:

Capital Efficiency: You control the same upside potential as owning Nvidia shares directly, but with a fraction of the capital required.
Defined Risk: Your maximum loss is limited to your initial investment. Unlike short-term options that can expire worthless quickly, LEAPS give you years for your thesis to play out.
Leverage to Major Catalysts: As Nvidia announces new GaN-powered chips and partnerships, you’ll be positioned to capture outsized gains. A modest 100% move in Nvidia’s stock price could translate to 400%+ returns on your LEAP position.

The First $10T Company?

This strategy is built on a straightforward premise: Nvidia has the potential to become the world’s first $10 trillion company if current growth rates and market multiples continue.

This isn’t wild speculation. Consider the facts…

Nvidia is already the most profitable chip company in history, with gross margins exceeding 70% in its data center business
The company dominates AI chip production with an estimated 90%+ market share in the crucial data center GPU segment
Global AI spending is projected to reach $500 billion annually by 2027, with Nvidia positioned as the primary beneficiary
The gallium nitride breakthrough could extend Moore’s Law for another decade, giving Nvidia continued exponential performance improvements

Excited yet?

But there’s something critical to keep mind…

If chip sales were to fall or growth were to slow significantly, our thesis would be invalidated – which is why proper risk management and staying informed about industry trends is crucial.

Your Action Plan

Here’s the play for those who want to participate in Nvidia’s potential continued growth during the transition to gallium nitride technology…

Buy the Nvidia (NVDA) January 21, 2028, $250 call options for approximately $33 per contract. (Your total cost per LEAP contract would be $3,300, as each options contract controls 100 shares.)

Let’s walk through exactly how this investment works and what kind of returns you could potentially see.

The Strike Price: We’ve selected the $250 strike price for our January 2028 LEAPS. This means you have the right to purchase Nvidia shares at $250 per share at any time before January 2028.

The Time Value: With more than two years until expiration, these LEAPS give Nvidia substantial time to develop and announce new GaN-based chips, expand production, and benefit from the broader AI infrastructure buildout.

Your Investment: At around $33 per LEAP, you’d pay $3,300 for each contract. This gives you leveraged exposure to 100 shares of Nvidia stock.

Calculating Your Profit Potential

Here’s where the numbers get exciting. Let’s assume Nvidia doubles from its 2025 highs of approximately $212 per share.

Target Price: $425 per share (double the 2025 high of $212)

Your Strike Price: $250

Intrinsic Value at Target: $425 – $250 = $175 per share

Your Cost: $33 per share equivalent

Profit per LEAP: $175 – $33 = $142 per share, or $14,200 per contract

Percentage Return: Approximately 430%

In other words, if Nvidia doubles from its 2025 peak – which is certainly achievable given the company’s trajectory and the upcoming gallium nitride catalyst – your initial $3,300 investment per contract could grow to over $17,500.

Understanding the Risks

While we’re optimistic about this opportunity, it’s crucial to understand the risks involved:

Time Decay: Although LEAPS experience slower time decay than short-term options, they still lose value as expiration approaches. If Nvidia trades sideways or down, your LEAPS will lose value.
Maximum Loss: Your maximum loss is 100% of your investment ($3,300 per contract in this example). If Nvidia trades below $250 at expiration, the LEAPS could expire worthless.
Market Risk: If chip demand softens, competition intensifies, or a broader market downturn occurs, Nvidia’s stock price could decline significantly.
Volatility Impact: Options prices are affected by implied volatility. If market volatility decreases, even if Nvidia’s stock price rises, your LEAPS might not appreciate as much as expected.

Reminder: Only invest capital you can afford to lose.

Why This Timing Makes Sense

We believe now is an opportune moment to establish this position for several reasons:

1. The GaN Partnership: Nvidia’s partnership with the gallium-nitride company signals they’re serious about transitioning to next-generation chip technology. This could be announced at upcoming technology conferences.

2. Upcoming Catalysts: Nvidia’s GPU Technology Conference (GTC) typically features major product announcements. The next GTC could unveil GaN-based chips, which would likely drive significant stock appreciation.

3. Long Runway: With expiration in January 2028, you have over two years for the GaN transition to materialize and impact Nvidia’s business.

4. Current Valuations: Despite Nvidia’s incredible run, the stock has consolidated from its peaks, potentially providing a more attractive entry point for leveraged exposure.

How to Execute The Trade

If you’re ready to implement this strategy, here’s your step-by-step guide:

Step 1: Open an Options Account

If you don’t already have an options-enabled brokerage account, you’ll need to apply for options trading approval. Most major brokers (Fidelity, Charles Schwab, TD Ameritrade, Interactive Brokers, etc.) offer this service. The approval process typically requires you to answer questions about your investment experience and risk tolerance.

Step 2: Search for the Nvidia LEAP

In your broker’s options chain, search for Nvidia (ticker: NVDA). Navigate to the options chain and filter for the January 21, 2028, expiration date. Then locate the $250 strike price call option.

Step 3: Review the Pricing

Options prices fluctuate throughout the trading day based on Nvidia’s stock price and other factors. The current price should be around $33 per share (or $3,300 per contract). However, verify the current market price before placing your order. Look at both the bid and ask prices -you’ll likely pay somewhere between these two prices.

Step 4: Determine Your Position Size

Decide how many contracts you want to purchase based on your risk tolerance and portfolio size. Remember, each contract costs approximately $3,300. Many investors start with just one or two contracts to limit their exposure while still participating in the upside.

Step 5: Place Your Order

We recommend using a limit order rather than a market order. This allows you to specify the maximum price you’re willing to pay. Set your limit price slightly above the current bid-ask midpoint to improve your chances of getting filled while still getting a reasonable price.

Managing Your Position

Once you’ve established your LEAP position, active management is crucial to maximizing your returns and managing risk.

Monitor Regularly but Don’t Overtrade

Check your position periodically, but avoid the temptation to react to every short-term price movement. LEAPS are meant to capture long-term trends, not day-to-day volatility.

Have an Exit Strategy

Consider taking profits if your LEAPS appreciate significantly (for example, if they double or triple in value). You don’t have to hold until expiration. Many successful options traders take profits at predetermined levels and redeploy capital into new opportunities.

Watch for Catalysts

Pay attention to Nvidia’s earnings reports, product announcements, and particularly their GPU Technology Conference (GTC). Major announcements – especially regarding GaN technology – could provide excellent opportunities to take profits or adjust your position.

What Could Drive Your Success

Several key catalysts could propel Nvidia higher over the next two years, making your LEAP investment highly profitable:

GaN Chip Announcement: If Nvidia announces new chip architectures using gallium-nitride technology, it would represent a paradigm shift. Chips that are 20X more powerful and 40% more energy-efficient would dramatically expand Nvidia’s addressable market.
AI Infrastructure Buildout: Companies like Microsoft, Amazon, Google, and Meta continue to spend billions building AI infrastructure. Nvidia is the primary beneficiary of this spending surge.
Expansion Beyond Data Centers: Nvidia’s automotive, robotics, and consumer electronics divisions could see explosive growth if GaN technology enables new applications that weren’t possible with silicon.
Continued Margin Expansion: If GaN chips can be manufactured more cheaply than cutting-edge silicon chips (which require extremely expensive equipment), Nvidia’s already exceptional profit margins could expand further.

This LEAP strategy offers an intelligent way to leverage Nvidia’s potential growth during the transition to gallium nitride technology.

The January 2028 expiration gives you plenty of time for this story to unfold. Major announcements typically don’t happen overnight, and having over two years of runway means you won’t be forced out of the position prematurely.

As always, we’ll keep you updated on any developments that might affect this recommendation. We’ll alert you to major Nvidia announcements, changes in the semiconductor landscape, and any shifts in our thinking about the GaN opportunity.

Remember: The biggest gains go to those who recognize transformative opportunities early.

The gallium-nitride revolution is here. Nvidia is positioned to benefit enormously.

And now you have a strategy to potentially capture up to 400% gains as this opportunity unfolds.