The Reason Why Nvidia Shares Stood Out in a Down Market on Tuesday



Nvidia stock jumped by 4.2% Tuesday morning. Even though all three leading indices were down as of 2:07 p.m. ET, the stock was still up 1%.

The revelation that prominent growth investor Cathie Wood is expanding her position again was the impetus for the semiconductor expert’s price increase.

What’s the Reason?

Nvidia’s stock price has been in the dumps due to falling demand for Nvidia (NASDAQ:NVDA) GPUs (gamer’s graphics processors) and new limits set by the United States government on the export of Nvidia’s chips for usage in China’s data centers and cloud computing.

Despite the recent drop, Ark Invest CEO and founder Cathie Wood have been aggressively purchasing Nvidia stock. On Monday, Wood made one of her most significant acquisitions of the month, shelling out $22.7 million for approximately 186,000 shares of Nvidia.

But that’s not all. More than 588,000 shares of Nvidia stock, a staple in five of Wood’s six flagship exchange-traded funds, have been added to these funds since September. With these most recent acquisitions, Ark now owns 1.25 million shares of Nvidia, valued at close to $154 million.

What’s Next?

Nvidia stock has dropped by around 63% from its all-time high at the end of last year, causing understandable alarm among investors. Some investors, especially those with a short-term horizon, have been scared off by the combination of the tech-centric sell-off and the protracted bear market.

However, Nvidia (NASDAQ:NVDA) was running on all cylinders before the economic downturn, as can be shown by taking a step back. The $26.9 billion in revenue that Nvidia raked in for fiscal 2022 (which ended on January 30) was a new high, up 61% year over year, leading to profits per share of $3.85, a new high of 123%.

This demonstrates that Nvidia (NASDAQ:NVDA) foundation is solid and will bounce back strongly if macroeconomic circumstances improve. Even with today’s drop, Nvidia stock sells at a price about ten times the expected sales for the following year. Although it seems high, it’s really the lowest price Nvidia stock has been in years. Those with a long-term perspective and the means to do so will look fantastic for making a purchase today.

Meta Description

A large financial institution is buying up Nvidia stock at a rapid clip.

Featured Image – Megapixl © Andreistanescu

Please See Disclaimer

About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.