Skepticism evidently great: star investor Cathie Wood sells off massive amounts of NVIDIA shares shortly before the balance sheet is presented

• NVIDIA ahead of numbers template
• Cathie Wood dumps NVIDIA stock
• Hope in new chip for Chinese market

NVIDIA opens third quarter books

The time has come on November 16: The US chip group NVIDIA will publish its balance sheet for the third quarter of 2022. In the previous quarter, the tech company had to accept a significant drop in profits and missed the sales target. “We are navigating our supply chain transitions in a challenging macro environment and we will get through this,” said CEO Jensen Huang on the weak data, according to a press release. “Accelerated computing and AI, pioneered by our company, are transforming industries.”

Analysts are expecting a slump in profits and sales

If Huang is also optimistic about the future of the company, the market experts are skeptical. Analysts expect NVIDIA to post earnings of $0.712 per share for the quarter ended October 31. In the same quarter of the previous year, the group was able to secure 1.17 US dollars per share. In terms of sales, the strategists expect $5.81 billion, after $7.1 billion in the third quarter of 2021.

Cathie Wood dumps numerous NVIDIA stocks

Cathie Wood, founder and CEO of investment company ARK Invest, also doesn’t seem quite as bullish on NVIDIA stock anymore. On November 4, the investor, who made a name for itself with her innovative ETFs at the beginning of the pandemic, but has recently been repeatedly criticized for the weak performance of the funds, sold a total of 192,337 NVIDA shares. Wood’s flagship ETF, the ARK Innovation ETF, now has 167,914 fewer shares in the chip developer. Only on October 20 were 50,252 shares sold. The exchange-traded fund, whose top positions once included NVIDIA, now only holds 514,972 shares. Some NVIDIA stocks also fell out of the ARK Next Generation Internet ETF. Here, Wood sold 24,423 NVIDIA shares, leaving 117,698 titles.

Incidentally, the star investor has already done something similar in the past, as “Bloomberg” reports. For example, ARK sold some NVIDIA shares just before the company opened its books for the second quarter and announced its disappointing sales guidance.

NVIDIA stock: from shooting star to problem child

If the NVIDIA share was considered a high flyer in the last two years, benefited from all kinds of trends such as cloud gaming and crypto mining and operates its own metaverse platform with the Omniverse, the paper has had to in the past few months – analogous to the entire tech industry – leave a lot of feathers. Since the beginning of the year, NVIDIA shares have already fallen 46.45 percent on the NASDAQ and most recently cost $157.50 (closing price on November 10, 2022). The current price level is a long way from the all-time high of 346.47 US dollars from November 2021.

New China chip could give NVIDIA shares a boost

However, the announcement that NVIDIA intends to offer a new chip in China that can be manufactured and distributed in accordance with the US government’s export control rules could provide a breath of fresh air. The restrictions announced at the beginning of September are intended to prevent US chip companies such as NVIDIA or its competitor AMD from exporting high-performance chips, which are primarily required for artificial intelligence applications, to China. At NVIDIA, the regulations have so far affected the A100 and H100 series. The new chip, called A800, is said to be the first product from a semiconductor company that was developed for the Chinese market and meets the new regulations, according to the Reuters news agency. After the export restrictions were announced, the company, which is based in Santa Clara, California, said that it was expecting a drop in sales of up to 400 million US dollars as a result.

Editorial office finanzen.ch

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