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Hedge funds bought Nvidia stock in Q3
Nvidia shares outperformed the broader market in Q3, gaining 18.1% on a total return basis (price change plus dividends) vs the S&P 500’s 8.1% total return.
(Image credit: YCharts)
During this July 1 through September 30 time frame, hedge funds were were net buyers of Nvidia stock.
According to WhaleWisdom, 48 hedge funds initiated new NVDA positions over the three-month period and 316 increased their stakes. This compares to 33 hedge funds that closed out of their Nvidia stakes entirely and 342 that reduced their positions.
The net change in hedge fund share ownership amounted to 4.6 million shares.
Related: Best Blue Chip Stocks: 21 Hedge Fund Top Picks
Does Nvidia pay a dividend?
Nvidia pays a small quarterly dividend of 1 cent per share, which works out to 4 cents per share annually.
Based on the chipmaker’s current stock price, this works out to a dividend yield of 0.02%. By comparison, the S&P 500’s current dividend yield is 1.2%.
In fiscal 2025, Nvidia paid roughly $834 billion in dividends. It also bought back $33.7 billion in stock.
– Karee Venema
Related: The Kiplinger Dividend 15: Our Favorite Dividend-Paying Stocks
Firstrade’s Stephen Callahan: What investors will be watching in Nvidia’s earnings
Nvidia reports earnings on November 19, and Wall Street is looking for a 17% quarter-over-quarter increase in revenue to $54.9 billion and earnings of $1.25 per share (+19% from Q2).
According to Stephen Callahan, trading behavior analyst at Firstrade Securities, those numbers look about right. “While many expect the chipmaker to beat these estimates, I agree with these numbers,” he says.
Nvidia’s Blackwell chips are likely to see strong demand, especially with the growth in spending on AI infrastructure for data centers. “Long-term contracts with big clients have given the chipmaker a predictable revenue pipeline,” Callahan notes.
But risks remain. “The tense trade relations between the U.S. and China pose potential land mines for the company,” the analyst warns. “These include stricter regulations that could affect sales.”
And the growing chatter about an AI bubble could weigh on Nvidia stock.
As for what investors will watch most closely? “Strong revenue growth from the data center sector” tops the list, along with guidance on future demand, China sales, profit margins and supply chain stability.
– Tom Taulli
What time is Nvidia’s earnings release?
Nvidia will release its fiscal third-quarter earnings report after the stock market closes on Wednesday, November 19. The results typically come through around 4:20 pm to 4:30 pm Eastern Standard Time.
The release of Nvidia’s earnings report will be followed by a conference call, which will begin at 5 pm EST.
Nvidia earnings: Harbinger of an AI bubble or proof the boom is real?
Ahead of Nvidia’s earnings this week, Wall Street is worried that there’s an AI bubble. In recent weeks, the sector has suffered from a spike in volatility.
According to Neil Azous, portfolio manager of Strategy Shares’ Monopoly ETF (MPLY), the concerns may be overblown.
“For those worried about ‘bubble’ talk, the stock is already down heading into earnings, and historically every dip in Nvidia has proven profitable. The asymmetry — one day or seven days after earnings — has favored the upside. Betting against the most important company in the world, with the resources it has, has generally been a losing trade. Taken together, these factors could alleviate many current concerns,” says Azous.
Brian Stutland, portfolio manager of the Rational Equity Armor Fund and the Catalyst Nasdaq-100 Hedged Equity Fund, agrees.
“The key is whether Nvidia continues hitting the targets analysts expect. Its forward price-to-earnings (P/E) ratio is around 31, which isn’t extreme. This isn’t like the late-’90s tech bubble, when major players traded at forward P/Es of 40 or 45,” says Stutland.
He adds that Nvidia’s valuation is reasonable and the company’s growth helps justify it. “I’m not convinced we’re at the tail end of a bubble. It would likely take a major catalyst to push the market significantly higher than expected, followed by a shakeout. As long as Nvidia delivers clarity through earnings and meets its growth targets, the higher multiples are justified, though there will still be volatility along the way.”
Regardless, Nvidia is the clear bellwether. And even if there are a few small cracks in its growth story, it seems likely that the talk about the AI bubble will not go away.
– Tom Taulli
Tom Taulli
Tom Taulli has been developing software since the 1980s. He sold his applications to a variety of publications. In college, he started his first company, which focused on the development of e-learning systems. He would go on to create other companies as well, including Hypermart.net that was sold to InfoSpace in 1996. Along the way, Tom has written columns for online publications such as Bloomberg, Forbes, Barron’s and Kiplinger. He has also written a variety of books, including Artificial Intelligence Basics: A Non-Technical Introduction.
Can Nvidia earnings reignite the AI flame?
That’s the question Matt Britzman, senior equity analyst at Hargreaves Lansdown, is asking.
“For the first time in several quarters, Nvidia enters earnings with sentiment under pressure. Shares have softened on concerns of an AI bubble and the reality that China sales are unlikely to rebound soon.”
However, Britzman says the overarching picture for Nvidia “remains strong” and he believes third-quarter revenue will come in near the top end of guidance, “at around $55 billion – and scope for an upside surprise.”
He believes market participants will be watching fourth-quarter guidance and any color for the year ahead.
“CEO Jensen Huang recently flagged $500 billion worth of orders on the books, and investors will be keen for clarity on timing, which could imply material upside to current forecasts. With plenty of nervousness in the air, strong results from Nvidia could be the perfect catalyst to reignite the AI flame,” says Britzman.
– Karee Venema
Nvidia stock opens lower to start earnings week
Nvidia stock opened lower Monday morning, down 0.9% at last check. The chip stock is down more than 7% for the month to date, but has still gained nearly 42% since the start of the year.
This comes as the broader equities market trades cautiously higher at the start of the week, with the blue-chip Dow Jones Industrial Average up 0.04%, the broader S&P 500 0.1% higher and the tech-heavy Nasdaq Composite enjoying a 0.2% lead.
– Karee Venema
Karee Venema
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021, and oversees a wide range of investing coverage, including content focused on equities, fixed income, mutual funds, ETFs, macroeconomics and more.
