Trading NVIDIA Stock After Q3 Earnings

Nvidia reported third-quarter earnings for the period ending October which showed better-than-expected sales but lower-than-expected earnings per share.  

Since reaching a record high of $346.47 in November 2021, the share price crumbled around 68% lower by October 2022. At the time of writing, Nvidia shares are up 45% from the lows of October.  

Learn more about Nvidia’s latest earnings report, what the analysts are forecasting and what the latest hedge fund activity on the stock has been. 

• The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Trading Nvidia Stock Pros and Cons

Nvidia’s latest third-quarter earnings report showed: 

• Revenue: $5.93 billion vs an expected $5.77 billion 
• Earnings per share: $0.58 vs an expected $0.69 per share 
• Gross margin down 53.6% due to an inventory charge related to lower demand for data centre chips in China 
• Gaming division sales of $1.57 billion which is down 51% year on year 
• Data centre sales of $3.83 billion which is up 31% year on year 

Nvidia is considered to be an important indicator of the overall health of the tech industry as it provides chips to cloud providers and computer makers. Due to lower overall demand from consumers, chip companies have slashed their order forecasts and have warned investors that customers are overstocked with chips.  

As such, Nvidia has slowed its pace of hiring to adapt to the changing climate. While Nvidia is known for its super-fast graphic processing units used in gaming, lower demand from China’s zero-Covid policy has seen them sell less to retailers due to them having more inventory than demand. Sales were down 51% year on year.  

While there were some positives in the earnings report from higher sales of its data centre chips to US cloud-based and internet companies, Nvidia warned it would also be hit by the US ban on artificial intelligence chips being sold to Chinese companies. 

Nvidia Hedge Fund Holdings

The latest 13F filing report submitted to the Securities and Exchange Commission of 462 hedge funds, shows that hedge funds increased their holdings in Nvidia shares by 9.5 million shares in the last full quarter.  

The overall trend quarter-by-quarter has been mixed this year. The March filing showed hedge funds increased their positions in the stock before the June filing showed they decreased their position in the stock.  

More notably, the September filing shows the biggest increase in hedge fund holdings for at least the past 8 quarters – likely due to the significant crash in its stock price.

Nvidia Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for an Nvidia stock forecast in the past 3 months, there are currently 21 buy, 7 hold and 0 sell ratings on the stock. The highest price level for an Nvidia stock forecast is $320.00 with the lowest price target at $133.00. 

The average price target for an Nvidia stock forecast is $196.15.

An Example Trading Idea for the Nvidia Stock Price

An example trading idea for the Nvidia share price could be as follows:  

• Buy the stock on a break above $166.00 to allow for current market volatility. 
• Target just below the average analyst price target at $196.00. 
• Keep your risk small at a maximum of 5% of your total account.   
• Time Line = 1 – 6 months  
• If you buy 10 Nvidia shares:  
  • If target is reached = $300.00 potential profit ($196.00 - $166.00 *10 shares).

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering that Nvidia was down 68% on the year in October.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Nvidia stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy Nvidia Stock in 4 Steps  

With Admirals, you can buy shares in companies like Nvidia with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

1. Open an account with Admirals to access the Trader’s Room.   
2. Click on Trade on one of your live or demo accounts to open the web platform.   
3. Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.   
4. Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level. 

Click on the banner below to trade Nvidia stock today! ▼▼▼ 

Do You See the Nvidia Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance Nvidia's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.  

This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article. 

INFORMATION ABOUT ANALYTICAL MATERIALS:   

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals’ investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:   

• This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.    
• Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content. 
• With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest. 
• The Analysis is prepared by an independent analyst, Jitanchandra Solanki (analyst), (hereinafter “Author”) based on their personal estimations.    

• Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.    
• Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed. 
• Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.