MICRO NODETimestamp: November 16, 2018

NVDA

NVIDIA

Inventory Glut

UNJUSTIFIED PANIC

SemiconductorsCryptoAIGaming

The Catalyst

“The 2017 crypto bubble burst, flooding the market with used GPUs. Nvidia missed earnings badly and guided down, admitting it had a massive inventory glut. The stock fell 50% over a few months. **Macro Context:** 10Y Treasury Yield: 3.08% **Earnings Context:** Reported EPS $0.046 vs Est $0.047 (Surprise: -2.1277%)”

The Aftermath

“Nvidia cleared the inventory and refocused on Data Center and AI. The launch of RTX ray-tracing cards and the explosion of AI demand (ChatGPT) proved that gaming was just the beginning of its growth story.”

Company Profile

Fundamental Overview (Current)

About

Nvidia Corporation is an American multinational technology company incorporated in Delaware and based in Santa Clara, California. It designs graphics processing units (GPUs) for the gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive market.

Sector

TECHNOLOGY

Industry

SEMICONDUCTORS

Market Cap

$4.62T

P/E Ratio

46.99

Beta

2.31

Div Yield

0.02%

52W High

$212.18

52W Low

$86.6

Hindsight Engine

Normalization of Historical Volatility Clusters

Entry Delta

-39.9%

Recovery Alpha

+5652.1%

Reference Peak

$5.49

Pre-Panic High

Panic Floor

$3.3

Moment of Capitulation

Drawdown Magnitude

-39.9%

Peak-to-Trough Delta

Alpha from Bottom

+5,652.121%

Total Return Delta

Macro Environment

Economic Indicators at Time of Event

Fed Funds Rate

2.20%

Inflation

2.44%

Unemployment

3.80%

10Y Treasury

3.08%

2Y Treasury

2.81%

30Y Treasury

3.33%

CPI

252.04%

Earnings Catalyst

Quarterly Report Data

Q4 2018Reported Nov 15, 2018

Reported EPS

$0.05

Estimated EPS

$0.05

Surprise

-0.00

Surprise %

-2.1%

Anatomy of the Crash

Sentiment Breakdown & Strategic Pivot Points

Stage 01: The Fear

At the lows, sentiment was capitulatory and flow was dominated by forced deleveraging, downgrades, and recession-style positioning. The market effectively priced a near-worst-case path, with drawdown conditions near -39.9% from the local pre-event level.

Stage 02: The Turnaround

Nvidia cleared the inventory and refocused on Data Center and AI.

Stage 03: Opportunity

The selloff was an overreaction: panic pricing implied durable impairment, but realized outcomes were materially better than the trough consensus. From the panic low to the current level, the asset recovered roughly 5657.6% after a drawdown of about -39.9%, illustrating how forced selling detached price from fundamentals.