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Stocks close mixed to start Nvidia week
All three main indexes opened higher Monday, but only one was in positive territory at the close. Tech stocks were the biggest decliners as bond yields continued to climb, while energy stocks outperformed as oil prices jumped to their highest level since early April.
At the close, the tech-heavy Nasdaq Composite was down 0.5% at 26,090 and the broader S&P 500 was off 0.07% at 7,403. The blue-chip Dow Jones Industrial Average was up 0.3% at 49,686.
Nvidia (NVDA) also closed lower today, falling 1.3% ahead of Wednesday’s earnings announcement.
“We fully expect the leading supplier of AI silicon will again exceed estimates and guide above Street given continued positive data points through Q1 as well as 1) healthy 2026 AI infrastructure spend (that we believe likely continues through 2027), and 2) superior supply chain certainty in a period plagued by constraints,” says Wedbush analyst Matt Bryson.
The real question, Bryson believes, is whether “we finally see a more positive stock reaction after a series of blasé moves following solid prints.”
Read more: Nasdaq Drops as Tech Stocks Slide: Stock Market Today
Hedge funds sold Nvidia stock in Q1
Nvidia shares underperformed the broader market in Q1, falling 6.5% on a total return basis (price change plus dividends) vs the S&P 500’s 4.3% drop.
(Image credit: YCharts)
During this December 31 through March 31 time frame, hedge funds were net sellers of Nvidia stock.
According to WhaleWisdom, 66 hedge funds initiated new positions in NVDA in Q1 and 402 increased their stakes. This compares to 66 that closed their positions and 363 that reduced their stakes.
The net change in hedge fund share ownership amounted to -126.6 million shares.
– Karee Venema
Read more: Best Blue Chip Stocks: 21 Hedge Fund Top Picks
Zacks’ Brian Mulberry gives his take on Nvidia’s upcoming earnings report
I had a chance to interview Brian Mulberry, chief market strategist at Zacks Investment Management, ahead of Nvidia’s upcoming earnings report. Here’s what he had to say:
What are you expecting? Our EPS target is $1.51 on $67.38 billion in revenue. That said, the last earnings per share was a beat of 6.6%, making the “whisper number” more like $1.60 in earnings to really move the market.
What were some of the main events during the quarter? We recently heard that the H200 is now going to be made more widely available to Chinese firms, which should help bolster strong revenue growth. Also, demand for Blackwell in data centers is only picking up. Data center revenue was up 75% last quarter and likely to be similar this quarter.
What about the danger signs? The biggest concern would be that demand for compute falls off, and the commitments to build data centers would then fall off as well. There is no indication of that, but it is a risk that needs to be addressed, as it is the single largest source of growth for NVDA.
Secondly, several of the larger orders from hyperscalers are now being financed by issued debt. Google, AMZN, and META have all issued significant new debt over the past year to finance their data center builds. With pressure on free cash flow, it could put stress on future orders, especially if interest rates do not fall as much as expected.
What will investors be looking for in the report? Tough to get in the minds of retail investors, but we are looking for details that show us production targets are being met to satisfy the demand for products.
Also, innovation is key to growth. We’re looking to see more about Vera Rubin and its progress, and finally, any comments around AI usage/demand structures impacting Nvidia’s forward guidance to the Street.
– Tom Taulli
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 1.1%.
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
Should Nvidia be worried about Cerebras’ blockbuster IPO?
Last week, Cerebras Systems (CBRS) pulled off a massive IPO. The semiconductor firm sold shares at $185 each and they ended the first day of trading at $331.07, up 68% from this offer price.
Cerebras raised $5.55 billion in its offering — making it one of the biggest IPOs ever — and gave the company a staggering market capitalization of $95 billion.
Not bad for a company that was founded 10 years ago. Then again, it’s a top developer of chips that train and operate AI models. The timing has also been spot on, as investors have an insatiable appetite for chip stocks.
Cerebras’ most advanced semiconductor is called the Wafer Scale Engine 3. It is about 50 to 60 times the size of an Nvidia GPU die and has 4 trillion transistors and 900,000 AI cores. Cerebras says it’s faster than Nvidia’s offerings.
So is this a big threat to the semiconductor giant?
Perhaps. But for now, Cerebras is more focused on niche opportunities. It’s not anywhere near the scale of Nvidia’s chips. Cerebras’ chips are also not as customizable.
Additionally, the competition intense, with startups such as Groq and SambaNova, and mature operators including Advanced Micro Devices (AMD) and Intel (INTC). There are also the hyperscalers: Alphabet’s (GOOGL) Google, Amazon (AMZN), Meta Platforms (META) and Microsoft (MSFT).
Finally, CBRS’ valuation is at nosebleed levels. While revenue surged 96% in the latest quarter, it was still only about $171 million.
All in all, expectations are extremely frothy for Cerebras.
– 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.
What time is Nvidia’s earnings release?
Nvidia will release its fiscal fourth-quarter earnings report after the stock market closes this Wednesday, May 20. 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 are the “ultimate test” for the stock market, says Questar CIO
Nvidia’s upcoming earnings event is “the ultimate test for a stock market that is not only trading at record highs, but one that also had a breathtaking bounce off of the March lows,” says Richard Reyle, chief investment officer at Questar Capital Partners.
The chipmaker is the stock market’s “shorthand for everything AI,” he explains, and in recent years, equity “gains have been driven in large part by AI.”
Heading into Wednesday’s print, Reyle says the numbers are already expected to be strong given the massive spending on AI initiatives hyperscalers announced this earnings season.
But stellar earnings for the chipmaker don’t mean upside for NVDA stock, the CIO warns. “To say that Nvidia is priced for perfection is an understatement.”
Indeed, the blue chip stock is up roughly 20% for the year to date to trade near new highs.
As such, Reyle says to “be careful around Nvidia.” In addition to a lot of hype around the stock, the CIO has “concerns about the circular spending in the AI space.”
He prefers “companies that have true moats in the tech space, such as Taiwan Semiconductor (TSM) and ASML Holding (ASML),” considering it will take at least a decade “for any other company to genuinely match their top-end manufacturing capability.”
– 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.
Nvidia stock trades lower to start earnings week
Nvidia stock opened higher Monday morning, but was last seen down 1.4%. The chip stock is still up more than 11% for the month to date, and has gained nearly 20% since the start of the year.
This comes as the broader equities market trades mixed at the start of the week, with the blue-chip Dow Jones Industrial Average up 0.1%, while the broader S&P 500 is off 0.3% and the tech-heavy Nasdaq Composite is down 0.6%.
