Nvidia stock (NASDAQ: NVDA) slumped over 2 percent on Monday as market anxiety intensified ahead of the chipmaker’s highly anticipated earnings report scheduled for after the market close on Wednesday.
The decline reflects broader nervousness in the tech sector, with investors taking profits and repositioning ahead of what may be the most consequential earnings announcement of the season.
Despite analyst optimism, the stock’s pullback underscores how fickle sentiment can be for even the most dominant players in the AI space.
The question now is whether Nvidia’s fundamentals can justify the premium valuations that have driven the stock up roughly 41 percent this year.
Nvidia stock: The weight of sky-high expectations
Nvidia’s earnings report isn’t just another quarterly update. The company has become the de facto bellwether for the entire AI sector and broader tech landscape.
Wall Street consensus expects revenue of $54.89 billion for the third quarter, representing about 56 percent year-over-year growth, with earnings per share projected at $1.25.
But here’s the problem: investors have already priced in these numbers and more.
The sell-off on Monday suggests mounting anxiety that Nvidia might simply meet expectations rather than beat them dramatically.
Historically, Nvidia has delivered stunning earnings beats, but that track record now works against the stock. Failing to surprise to the upside could trigger a painful reversal.
Technical analysts point out that the stock has found resistance around the $200 level after failing to hold above it earlier in November.
If the earnings report disappoints, or even if it merely meets expectations, some analysts warn that NVDA could decline toward support near $165.
One additional headwind is that the broader market remains on edge.
Tech stocks have faced selling pressure lately as investors grapple with concerns about elevated valuations and evidence of what some are calling an AI bubble.
Semiconductors specifically took a hit on Friday, with Lam Research dropping over 3 percent and ON Semiconductor sinking more than 2 percent.
High-profile investors are heading for the exits
What’s really rattling NVDA bulls right now is the sudden wave of big-name investors heading for the exits.
Just last week, SoftBank quietly revealed that it had completely unloaded its entire $5.8 billion Nvidia stake.
Then, only a few days later, Peter Thiel’s hedge fund disclosed it had dumped its full $100 million position, all 537,742 shares, which made up about 40% of the fund’s equity portfolio.
And the timing couldn’t be more eyebrow-raising. These moves came right before Nvidia’s earnings, adding even more psychological pressure to Monday’s selloff.
Thiel has been vocal before about AI stocks looking eerily similar to the dot-com bubble’s peak. His exit feels like a pretty loud signal that he thinks the market may have gotten way ahead of itself.
If that wasn’t enough, Michael Burry, yes, the “Big Short” guy, has taken on sizable bearish positions using put options, making a clear bet that Nvidia’s price is due for a pullback.
What makes all this even more interesting is how sharply it contradicts the dominant Wall Street view.
Nearly every major firm: JPMorgan, Morgan Stanley, Wells Fargo, Evercore ISI, remains firmly in the “Buy” camp, with price targets stretching from $215 to $265.
But when seasoned investors like Thiel and Burry break from the pack, it’s a reminder that not everyone is sold on Nvidia’s growth story staying bulletproof.
And historically, that kind of disconnect between bullish analyst calls and insider skepticism has often been a warning sign before markets correct.
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