Nvidia Reverses Sharply on Friday After Post-Earnings Surge, CNBC Column Points to Fed
Nvidia shares dropped 4.6% Friday after a post-earnings pop. CNBC column points to Fed comments and short-selling pressure.
The column said the sell-off coincided with remarks by Federal Reserve Chairman Kevin Warsh, though it did not elaborate on the remarks. The move erased more than half of Thursday's gain.
Comparing the pattern to Intel's post-earnings drop, the column noted that Intel also fell after reporting a strong quarter. "Intel happened faster, but the pattern was ridiculously similar," the column said. With Nvidia, the selling occurred in the Friday session, while Intel's selling came the day after its report.
The column also addressed the role of short sellers, speculating that the hedge fund Situational Awareness had employed aggressive short-selling tactics that could drive stocks down even when companies delivered good results. It cited ServiceNow, Workday, and Salesforce as examples of software companies that have continued to report solid quarters, challenging the "SaaSpocalypse" thesis.
The column added that a reported takeover interest in Workday by Silver Lake, a private equity firm, might help change the narrative for software stocks.
The column argued that Nvidia's decline appeared to be driven less by its fundamentals than by broader market forces, including the Fed.