$NVDA deep dive: down 29% in five weeks before earnings. I think it's a buy, add at $164-$168
$NVDA is down 29% from its October high in five weeks. First the midterm selloff took 9% off in one day. Then the board opened an independent review of Jensen Huang and a shareholder class action followed. I think it's a buy here and a better buy in the $164 to $168 zone.
The business: Q2 revenue was $96.2B (+106%) with data center at $89.0B. Gross margin was 75%. For the quarter that just ended @nvidia guided to $108B plus or minus 2% with no China data center sales included. That is nearly 90% growth year over year. Management sees fiscal 2028 revenue up about 70% and says supply is the limit.
What you pay: about 23x trailing earnings. Taiwan Semi is at 25x and Broadcom is at 41x. The balance sheet has $56.6B in cash and debt securities against $33.4B of debt.
The risks are real. There is no obvious successor to Huang. Democrats won Congress and investors fear limits on new data centers. Gross margin is guided down to 71% to 72% in Q4 as memory costs rise.
Chart: $243 high on Oct 6 to about $172 today. It sits below the 20, 50 and 200 day. RSI is 27 and Monday volume was more than 3x normal. My Elliott read is an A B C correction of the March to October impulse with C = A near $167.53 right above the $164.27 March low.
My plan: start here and add at $164 to $168. A daily close under $164 or a weak Q4 guide or Huang leaving without a plan makes it a hold. A close back above the 200 day near $205 says the correction is over. Earnings are Nov 17 after the close.
Not financial advice.
Two frames from the deep dive: the five week drop into earnings and my Elliott Wave levels (support $164 to $168, C = A near $167.53, invalidation on a close under $164.27, reclaim at the 200 day near $205).
Sources: NVIDIA Q2 FY27 results and Q3 outlook (Aug 26 2026) · NVIDIA 10-Q for quarter ended Jul 26 2026 (SEC) · CNBC: Nvidia board opens independent probe, stock falls 4.27% (Nov 9) · Reuters: Nvidia and Huang sued in proposed class action (Nov 9) · AP: Shareholder lawsuit; shares -4.3% Monday (Nov 10) · CNBC: Postelection chip selloff, Nasdaq -5.5% (Nov 5)
Not financial advice. For informational and educational purposes only.
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