Nvidia Corp (NASDAQ:NVDA) shares are trading lower Tuesday afternoon following reports that SoftBank Group (OTC:SFTBF) offloaded its entire stake in the chipmaker. Here’s what investors need to know.
What To Know: SoftBank sold 32.1 million shares of Nvidia in October, raising $5.83 billion to help fund its major investments in artificial intelligence, including a significant commitment to OpenAI. SoftBank’s CFO noted the large AI investment requires the use of existing assets.
Tuesday’s negative reaction is not due to the shares flooding the market as the stock sales occurred in October. Instead, Nvidia shares are falling because of the disclosure and market signal the sale represents. This news appears to have shaken investor confidence, sparking fears that the AI-driven rally has run too far.
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What Else: This market pressure comes as investors look ahead to Nvidia’s third-quarter earnings report, scheduled for Nov. 19, after the market close. Heading into the announcement, Wall Street consensus estimates call for earnings per share of $1.22 and $54.7 billion in quarterly revenue.
Despite the sale by a major holder, broader analyst sentiment on Nvidia remains overwhelmingly positive. The stock carries numerous Buy and Overweight ratings from firms like Citigroup, Goldman Sachs and UBS.
Most recently, Citigroup maintained its Buy rating on Monday, reflecting continued confidence from the analyst firm in Nvidia’s long-term prospects.
NVDA Analysis: Despite Tuesday’s pullback, Nvidia has shown impressive resilience, with a year-to-date performance up 39.3%, indicating strong investor interest and confidence in its growth prospects.
From a technical standpoint, Nvidia is currently trading approximately 4.8% above its 50-day moving average of $183.93, suggesting that the stock remains in a bullish trend in the short term. However, it is also important to note that the stock is trading 28.6% above its 200-day moving average of $149.84, which could indicate potential overextension and a need for consolidation.
The relative strength index (RSI) stands at 57.56, signaling a neutral position, which may suggest that the stock is neither overbought nor oversold at this juncture.
Benzinga Edge Rankings: Adding to the picture, Benzinga Edge Rankings data shows Nvidia scoring exceptionally high on Growth (98.26), Quality (93.07) and Momentum (86.05).
How To Buy NVDA Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Nvidia’s case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
NVDA Price Action: Nvidia shares were down 3.17% at $192.72 at the time of publication on Tuesday, per Benzinga Pro.
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