Short-seller who predicted Valeant plunge targets surging trader favorite Nvidia

Key Points
  • Andrew Left of Citron Research issues a negative call on Nvidia.
  • The chipmaker's shares have more than tripled in the last year, the best return of any stock in the S&P 500.
Nvidia is a "casino stock": Citron's Andrew Left
Nvidia is a "casino stock": Citron's Andrew Left

Citron Research's Andrew Left, who gained attention for successful bets against companies including Valeant Pharmaceuticals, tweeted on Friday that he sees Nvidia shares going down to $130.

Tweet Link

The stock dropped after the short-seller's tweet. Nvidia plunged 8 percent Friday after being up as much as 5 percent earlier.

"Take your profits and move on to Google (Alphabet). Exposure to the identical array of 'sexy businesses' with less risk on the downside. In the recent frenzy in NVIDIA shares, it has added more to its market cap than the total valuation of its competitor AMD. Now it is fueled by an irresponsibly bullish number from Citi," Citron Research wrote in a post entitled "NVIDIA: The Moment that Separates the Gamblers from the Investors. NVDA to Trade back to $130."

A Nvidia decline to $130, would represent a fall of nearly 20 percent for the shares.

"It's no longer a stock, it's a casino," Left said in an exclusive interview on CNBC's "Halftime Report" Friday.

"It's over optimism, it's discounting the competition. It's not understanding the market factors. Of course Nvidia is not a fraud or a scam. It's a wonderful company. But unfortunately it got way ahead of itself," he added.

Left confirmed he is currently short shares of Nvidia on-air.

In contrast, Wall Street is one-upping themselves trying to be the most bullish firm on Nvidia. Citi Research, Bank of America Merrill Lynch and UBS have all raised their price targets on semiconductor company in recent days.

Wall Street analysts keep one-upping each other to be biggest bull on red-hot Nvidia
Wall Street analysts keep one-upping each other to be biggest bull on red-hot Nvidia

Left cited competition coming from Intel, AMD, Google and Xilinx in the data center markets and the likelihood of slowing growth in its gaming graphics card business as reasons for his skeptical view on Nvidia's recent rally.

Nvidia shares have risen 238 percent through Thursday in the previous 12 months compared with the market's 15 percent return. That performance ranks No. 1 in the entire S&P 500, according to FactSet. The shares are up 50 percent this year versus the market's 9 percent performance.

This wasn't the first time Citron expressed a negative view on Nvidia shares. He predicted last December that the stock would decline to $90.

And not all of the short-seller's recent calls have gone well. Left admitted he was losing on his bearish view on online furniture retailer Wayfair last month.

"With Wayfair, my timing is off right now, which is fine," Left said on CNBC's "Halftime Report."

Wayfair shares are up more than 100 percent this year.

Nvidia declined to comment for this story.

Correction: This story corrected when Left made his earlier prediction that Nvidia would decline to $90. He made it last December.


Watch: How to play Nvidia

Nvidia sinks 9%; Here's how to play it
Nvidia sinks 9%; Here's how to play it