Nvidia Down About 10% From All-Time Highs: Prominent Trader Says He Has Cashed Out Of The Stock Barely A Week Ahead Of Earnings And Will 'Decide On Re-entering' Later

Shares of Nvidia Corp. NVDA, the poster child of the artificial intelligence revolution, have seen some volatility in recent sessions along with the recent broader market.

What Happened: Steve Grasso, a Wall Street trader and market analyst, said Tuesday that he now does not hold a position in Nvidia. “Just sold the balance of my $NVDA currently holding 0 Judging on price action I'll decide on re-entering,” he said in a post on X, formerly Twitter.

One of his followers probed as to when he would re-enter the stock, Grasso said, “Depends on the discount. I'm going to let it trade a bit.”

On Monday, after Nvidia surged back to $130 from the $103 level it fell to during the Aug. 5 market downturn, Grasso revealed he had sold off 50% of his Nvidia shares. The founder of Grasso Global said he had bought the shares for $100 and would typically have sold 100% of them. “Feel as if it might have some juice left into earnings,” he said.

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Why It’s Important: The next big catalyst for Nvidia is on Friday when Fed Chair Jerome Powell is scheduled to deliver his Jackson Hole Symposium address. Given that the stock has led the market, either on its way up or down, it is likely that Powell’s speech could have ramifications for the stock.

An even bigger event to look forward to is Nvidia’s fiscal year 2025 second-quarter earnings due after the market close on Wednesday, Aug. 28. The company is widely expected to report earnings of 64 cents per share and revenue of $28.46 billion, according to Benzinga Pro data. This compares to the year-ago’s 25 cents (split-adjusted) and $13.51 billion, respectively.

The company has been consistently outperforming elevated expectations for multiple quarters now and it remains to be seen if it can extend the streak. The stock was recently hit by negative headlines regarding a potential delay in the launch of the second-gen of its B200 accelerator chips. Also, China continues to be a cause of worry amid the U.S. chip ban.

Commenting on his expectations, Oppenheimer analyst Rick Schafer said in a note on Tuesday that he expects upside to second-quarter results and the third-quarter outlook, premising the optimism on sustained cloud service provider/enterprise AI demand. The analyst looks forward to a low-volume market introduction for the Blackwell 100 accelerators in the fourth quarter, with a meaningful ramp likely in the next quarter.

Nvidia is best positioned in AI, Schafer said, as he reiterated an Outperform rating and $150 price target.

The shares ended Tuesday’s session down 2.12% at $127.25, according to Benzinga Pro data.

Nvidia has soared 157% for the year-to-date period compared to the SPDR S&P 500 ETF Trust’s SPY 18% advance and the iShares Semiconductor ETF‘s SOXX 21% gain.

Image via Nvidia Blog