Nvidia plummets after earnings — here's how to trade the chips now 

Shares of semiconductor manufacturer Nvidia plunged on Thursday after reporting quarterly earnings. The company reported third-quarter revenue results that came in below analysts' expectations, and its fourth-quarter revenue guidance also missed estimates.

After a 40 percent crash from Nvidia's 2018 peak to its October low, TradingAnalysis.com founder and technical analyst Todd Gordon is bullish on the name. He said that from a technical perspective the stock is gaining strength.

"What I like about this and the overall space is we're showing relative strength in the semis, which was a major source of NASDAQ weakness over the last few months. I like the move up. We've made a higher low, and we're starting to see semis move back. I'm not involved in Nvidia, but I did buy AMD yesterday for my portfolio. So I'm constructive on tech as well as chips in here," Todd Gordon, founder of TradingAnalysis.com, said Thursday afternoon on CNBC's "Trading Nation."

Nvidia shares are now up just 5 percent this year after several years of meteoric gains; the stock rose 224 percent in 2016 and 81 percent in 2017. More broadly, the trade war between the U.S. and China has rocked the semiconductor group this year given their exposure to China.

Gina Sanchez, CEO of Chantico Global, is wary of the name living up to expectations in several areas of its report.

"I think the big, overarching theme was the concern around China and trade tariffs, and that certainly weighs on the semis. But you also have this combination of oversupply of semi stocks, along with waning demand, and that's not good. Nvidia's bread and butter is gaming, so they have to show continued positive growth in the gaming space," she said Thursday on "Trading Nation."

Sanchez added: "Their up-and-comer has to be the cloud. They have to also really knock the lights out with the cloud," and there's some vulnerability for the stock if its earnings report does not reflect that.

Shares of Nvidia were trading nearly 4 percent higher on Thursday, around $204.43. Wall Street analysts are expecting earnings of $1.71 per share, according to FactSet data.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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