Nvidia Stock Drops Again. What Could Stop the Slide.

Nvidia chips are the favored choice for training artificial-intelligence models. (Akio Kon/Bloomberg)

Key Points

• Nvidia’s stock fell again, following a 3.6% drop on Thursday as part of a broader decline in technology stocks.
• Analysts anticipate strong third-quarter results and higher fourth-quarter guidance for Nvidia, driven by increased shipments of Blackwell Ultra hardware.
• Nvidia opposes proposed legislation requiring chip firms to prioritize U.S. demand over exports to China and other embargoed countries.

Nvidia was falling again Friday as investors ran away from technology stocks. The pain could be a nagging one until the chip maker’s earnings next week.

Shares were down 0.6% at $185.78 in early trading. The stock fell 3.6% on Thursday.

The move was broadly in line with other chip stocks exposed to the artificial-intelligence trade. Advanced Micro Devices was down 0.8% and Broadcom lost 1.6% in early trading.

The drops are putting pressure on Nvidia to deliver with its earnings report on Wednesday. Wall Street analysts are generally positive on its prospects.

“We expect Nvidia to report strong F3Q (Oct) results and guide F4Q (Jan) higher,” wrote KeyBanc analyst John Vinh in a research note, as he maintained an Overweight rating and $250 target price on the shares.

Vinh said increasing shipments of Nvidia’s Blackwell Ultra hardware would drive growth and noted the company was raising production of its older Hopper chips, which could mean it is resuming shipments to China.

Nvidia declined to comment on whether it plans to resume China shipments. The company has previously said it is assuming no Chinese revenue as Beijing discourages domestic companies form using U.S. hardware.

Morgan Stanley analyst Joseph Moore is even more optimistic about Nvidia’s coming results. He reaffirmed an Overweight rating on the stock and raised his price target to $220 from $210.

“We expect something of a breakout quarter,” he wrote. “Demand signals across Nvidia’s customers and suppliers in Q3 point to accelerating demand.”

Debate continues to rage about exports of advanced AI chips. Microsoft and Amazon.com are both supporting proposed legislation which would require chip firms to satisfy U.S. demand before sending products to China and other countries subject to arms embargoes, a policy which Nvidia opposes, according to The Wall Street Journal.

“We don’t sell restricted products to adversaries at the expense of American companies. Sales to authorized customers worldwide do not deprive U.S. customers of anything—and in fact expand the market for many U.S. businesses and industries,” an Nvidia spokesperson told Barron’s Friday in an emailed statement. “The pundits feeding fake news to Congress about chip supply would overturn President [Donald] Trump’s AI Action Plan and surrender America’s chance to lead in AI and computing worldwide.”

Write to Adam Clark at adam.clark@barrons.com