NVIDIA Corp (NVDA)

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Is NVIDA Stock Getting Too Cheap to Ignore?
By: MarketBeat | October 17, 2022

What a difference a year makes. Just less than a year ago, graphic semiconductor chip supplier NVIDIA (NASDAQ: NVDA) stock was riding high in the $340s with the underlying business firing on all cylinders. Total revenues grew 46% to record levels. Its video gaming segment saw sales grow 31% to $3.62 billion in sales and data center demand including artificial intelligence (AI) was off the charts as the segment saw a jaw-dropping 83% growth spike in sales to $3.75 billion. Bitcoin was hitting records levels in the high $60,000s, and the Company was smoking all analyst estimates with each record-breaking earnings release in 2021. Nvidia stock was a darling of Wall Street and the sentiment was very bullish. The good times were still very good heading into 2022.

Abrupt Reversal of Fortune

Fast forward 11 months later October 2022, and the previous tailwinds have reversed into headwinds as investment sentiment also took a complete reversal. The stock has fallen (-62%) for the year having just made 52-week lows at $108.13. The Wall Street darling turned into a pariah. The video gaming segment continues to lose steam as sales collapsed (-33%). Data center sales remain strong, but investors are waiting for that shoe to drop following earnings warnings from Advanced Micro Devices (NYSE: AMD), Marvell Technologies (NASDAQ: MRVL), Western Digital (NYSE: WDC), and Intel (NASDAQ: INTC). The U.S. implemented A.I. chip restrictions on sales to China, which will mean at least a $400 million hit to the Company’s bottom line. The U.S. Federal reserve is hell bent on slowing down the economy with round after round of aggressive rate hikes. Supply chains are clearing up, but demand is drying up as well. Inflation is still prevalent as indicated by the September headline CPI of 8.2%. ..

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