Nvidia shares were down sharply, one day before the leading artificial intelligence chipmaker’s pivotal earnings report Wednesday evening. Tuesday’s stock decline presents a great entry point for investors who don’t own Nvidia, according to Jim Cramer. Nvidia’s drop of as much as 6.7% at session lows was likely driven by profit-takers ahead of the company’s quarterly release. Some Wall Street pros say the closely watched results represent a test for broader investor optimism about generative AI. Nvidia entered the holiday-shortened trading week up a blistering 47% year to date, after more than tripling in value in 2023. Investors who have been waiting for an opportunity to own Nvidia are getting one Tuesday, Jim said. “I think you buy some if you don’t own any,” he said, noting the importance, as always, of starting a new position with a small initial purchase. “Maybe buy some more tomorrow,” he added. Even for investors who have long owned the stock, Nvidia’s decline Tuesday was welcome news. “How great is it that Nvidia is coming in? … You just don’t want these stocks up, up, up,” Jim said, reflecting the nuance that’s needed despite bestowing Nvidia the rare “own it, don’t trade it” designation. It is possible to both believe a company’s long-term future is bright, as we do with Nvidia, and wish for its stock to not overheat. NVDA 5Y mountain Nvidia 5 years Wall Street has set a high bar for Nvidia’s Wednesday night report, which will include both fiscal 2024 fourth-quarter results and guidance for its fiscal 2025 first quarter. Recent earnings from key customers — namely tech giants such as Microsoft and Meta Platforms and partners like server maker Super Micro —suggest demand for Nvidia’s AI chips remains fervent. Still, the magnitude of Nvidia’s outperformance, even with Tuesday’s decline, means its stock is vulnerable to a sell-off after the report. That is especially true if Nvidia’s results and guidance don’t surpass expectations at all. But it’s…
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