Nvidia Stock Drops Seven Days Ahead of Q2 Earnings

Shares of Nvidia Corporation declined for seven consecutive sessions ending August 24, marking the company's longest losing streak in four years. The stock closed at $214.75 on Friday, August 22, before falling more than 2% on Monday. This downturn coincides with a broader slump in semiconductor stocks, including AMD, TSMC, and Broadcom.

Investor anxiety centers on reports that Nvidia plans to increase AI chip server prices by up to 15% next year due to rising memory costs. Markets are also reacting to concerns over circular financing, specifically a plan to raise over $500 billion with partners like BlackRock and Goldman Sachs to help customers fund Nvidia hardware purchases. Further scrutiny follows a securities filing showing Nvidia guaranteed up to $105 billion in lease obligations for an OpenAI campus in Ohio.

Despite the volatility, Nvidia continues to expand its infrastructure and investments. The company recently signed a $1.5 billion multi-year agreement with Amkor Technology to develop advanced packaging for AI systems, including a prepayment for a campus in Arizona. Nvidia also invested $6 billion in Poolside AI, though some analysts view these activities as capital allocation risks.

Investors are now focused on the second-quarter earnings report scheduled for release after the closing bell on Wednesday, August 27. Analysts expect earnings of $2.01 per share and revenue guidance of approximately $91 billion. Despite the recent slide, 26 analysts tracked by TipRanks maintain buy ratings with an average price target of $301.82.