Veteran stock trader has surprising Nvidia take ahead of earnings

The game is forever known as “The Comeback” and it’s easy to see why.

Return with us now to that thrilling day of yesteryear better known as Jan. 3, 1993.

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U.S. President George H.W. Bush, who had just lost the White House to Bill Clinton, was in Moscow to sign the second Strategic Arms Reduction Treaty with Russian leader Boris Yeltsin.

Meanwhile, the Buffalo Bills overcame a 35-3 deficit to defeat the visiting Houston Oilers 41-38 in overtime and set what then was the record for the largest comeback in National Football League history.

The 32-point deficit in the game — also known as “The Choke” depending on which side of the field you were on — was surpassed by the Minnesota Vikings’ 33-point run over the Indianapolis Colts during the 2022 regular season. But the Bills still hold the record for the largest comeback in postseason history and the second largest including the regular season. 

It was also the first time an NFL team with a lead of at least 30 points lost the game.

Nvidia CEO Jensen Huang said it would be a ‘tremendous loss’ to be blocked from China’s AI market.

JOSH EDELSON/Getty Images

Nvidia CEO Huang: ‘We just have to stay agile’

Veteran trader Ed Ponsi sees a potential comeback scenario for Nvidia  (NVDA) , which is scheduled to report earnings on May 28.

Analysts are looking for earnings of 83 cents a share on $43.28 billion in revenue.

Not too long ago, Nvidia was riding so high it looked like nothing could stop the AI-chip steamroller. 

The Santa Clara, Calif., company’s stock more than tripled (up 238%) in 2023, followed by a 171% rally in 2024.

“Those massive gains made the stock immensely popular, leading to an intense focus by investors,” Ponsi said in his TheStreet Pro column. This year “has been less kind to the AI-chip maker. Nvidia shares are down 17.71% year to date. The stock is underperforming all of the major U.S. stock indexes.”

Nvidia’s troubles started in January with the arrival of a cost-effective artificial-intelligence model from the Chinese startup DeepSeek, which sparked concerns about big tech companies overspending on data centers and Nvidia chips.

More Nvidia:

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Then tech conglomerate Huawei said it planned to start testing a highly anticipated AI chip that it touted as a rival to Nvidia’s H100, a graphics processing unit used by companies such as Tesla  (TSLA)  and Meta Platforms  (META) .

Nvidia also got caught up in President Donald Trump’s global tariff net. The company’s reliance on Taiwan for chip manufacturing makes it vulnerable to geopolitical tensions and potential retaliation from China.

The Trump administration restricted the shipment of Nvidia’s H20 chips to China without a license last month, leading the company to plan a $5.5 billion quarterly charge.

However, the White House is expected to reveal its new AI diffusion rule on May 15, and will likely outline AI-policy changes that favor Nvidia and its peers

“Looking at the stock’s chart, one question emerges,” Ponsi said.  “Is Nvidia about to regain its crown as the most coveted stock in the market?”

Nvidia CEO Jensen Huang said in a May 6 interview with CNBC that it would be a “tremendous loss” to be blocked from China’s AI market.

Veteran trader sees signs of Nvidia comeback

“We just have to stay agile,” Huang said. “Whatever the policies are of the government, whatever is in the best interest of our country, we’ll support.”

Nvidia’s co-founder was in Las Vegas for software company ServiceNow’s NOW 2025 conference.

The companies said they’d expand their partnership, which includes the debut of the ServiceNow reasoning model, Apriel Nemotron 15B, developed with Nvidia.

Huang said China’s artificial intelligence market will likely reach about $50 billion in the next two to three years

Being able to sell into China would bring back revenue and taxes, and would “create lots of jobs here in the United States,” Huang said.

Piper Sandler warned that Nvidia could lose up to 6.45% of its important data-center revenue if companies cut back on spending, according to TipRanks. 

This could mean about $9.8 billion in lost revenue if corporate capital expenditures shrink and demand from China stays weak.

In the worst-case scenario, the investment firm said, Nvidia’s share price could drop to about $76.25 if the revenue loss happens.

Related: Nvidia CEO sounds the alarm on Chinese rival

If, however, corporate spending returns to normal and China demand picks up, the shares could rise to around $126. Piper Sandler affirmed its overweight rating on Nvidia with a $150 price target.

Ponsi said that signs of an Nvidia comeback are beginning to emerge. 

“Since the April 7 opening bell, Nvidia has gained 23%,” he said. “The stock is trading above its 50-day moving average for the first time since late February.”

Semiconductor stocks in general are on the rebound, he said, with the Philadelphia Semiconductor Index, like Nvidia, climbing above its 50-day moving average for the first time since February.

Ponsi said Nvidia would face obstacles along the way. Nvidia’s 200-day moving average currently lies in wait near $125 and there’s a bearish trendline also residing in that vicinity.

“If Nvidia can demonstrate the necessary strength to break through that area, the door is open to $140 — and possibly higher,” he said. “Nvidia’s all-time closing high is $149, set on Jan. 6.”

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