Without commenting on which company is extremely successful and which one used to be, here is a timely and interesting pairs trade in the semi space. My reading of the charts, suggests NVDA’s bounce ends today with a likely revist to it’s bounce highs either tomorrow or Wed.

One could short NVDA (either directly or using options) and go long INTC, again either with the equity and or options. I fully expect that at least for weeks and more likely months, NVDA will trade substantially lower, while INTC in the low thirties, is a long term buy, at least for a two to three year turnaround.

An additional factor, that while a longshot, is not totally unlikely, is that NVDA actually decides to BUY INTC for something like $70 per share. While against most large mergers, this administration has gone out of it’s way to support semis and particularly to subsidize building chip plants in the US.

It wouldn’t be a stretch to see them support such a deal, since NVDA and many other non fab chip companies, have most if not all of their chips manufactured in Taiwan. (This is not investment advice, just my opinion.)