Nvidia jumps into its earnings report, here’s how to trade semis now

Shares of semiconductor manufacturer Nvidia surged on Thursday ahead of its earnings report due out after the bell, along with the rest of the chip space. Some see the name heading higher even as the group faces tariff-related vulnerabilities.

After a 40 percent crash from Nvidia’s 2018 peak to its October low, TradingAnalysis.com founder and technical analyst Todd Gordon is bullish on the name. He said that from a technical perspective the stock is gaining strength.

“What I like about this and the overall space is we’re showing relative strength in the semis, which was a major source of NASDAQ weakness over the last few months. I like the move up. We’ve made a higher low, and we’re starting to see semis move back. I’m not involved in Nvidia, but I did buy AMD yesterday for my portfolio. So I’m constructive on tech as well as chips in here,” Todd Gordon, founder of TradingAnalysis.com, said Thursday afternoon on CNBC’s “Trading Nation.”

Nvidia shares are now up just 5 percent this year after several years of meteoric gains; the stock rose 224 percent in 2016 and 81 percent in 2017. More broadly, the trade war between the U.S. and China has rocked the semiconductor group this year given their exposure to China.

Gina Sanchez, CEO of Chantico Global, is wary of the name living up to expectations in several areas of its report.

“I think the big, overarching theme was the concern around China and trade tariffs, and that certainly weighs on the semis. But you also have this combination of oversupply of semi stocks, along with waning demand, and that’s not good. Nvidia’s bread and butter is gaming, so they have to show continued positive growth in the gaming space,” she said Thursday on “Trading Nation.”

Sanchez added: “Their up-and-comer has to be the cloud. They have to also really knock the lights out with the cloud,” and there’s some vulnerability for the stock if its earnings report does not reflect that.

Shares of Nvidia were trading nearly 4 percent higher on Thursday, around $204.43. Wall Street analysts are expecting earnings of $1.71 per share, according to FactSet data.

Leave a Reply

Your email address will not be published. Required fields are marked *

19 + = 28