What happened
Shares of tech giant Nvidia (NVDA -2.48%) fell 16.8% in January, according to data from S&P Global Market Intelligence. The primary catalyst for the stock's poor performance was weakness in the stock market in general, and particular weakness in the tech sector.
Despite January's pullback, Nvidia stock remains a big winner over the past year. It's returned 86.2% over the one-year period through Feb. 1 -- nearly four times the S&P 500 index's 22.2% return over this period.
Image source: Getty Images.
So what
Market dynamics, rather than company-specific news, was the main driver behind shares of the graphics processing unit (GPU) specialist dropping in January. The S&P 500 and tech-heavy Nasdaq Composite indexes were down 5.3% and 9%, respectively, last month.
The market's struggle last month stems from the anticipation that the Federal Reserve will soon begin raising interest rates and that there will be several rate hikes in 2022. Interest-rate sensitive stocks were especially hit hard. This group includes technology growth stocks, such as Nvidia. Moreover, in general, higher valued tech stocks -- a category in which Nvidia belongs -- suffered the most.
That said, last month, there was one piece of company-specific news that moved Nvidia stock. On Jan. 25, shares fell 4.5% following news reports opining that Nvidia would likely abandon its attempt to acquire leading mobile-chip designer Arm. The writing has been on the wall for some time that the giant deal would probably not go through because of regulatory concerns. So, the news reports that came out late last month shouldn't have come as much of a surprise to investors who have been closely following the company.
The next day -- Jan. 26 -- Nvidia stock partially recovered, so its two-day loss was just 2.6%. The Nasdaq Composite index was down 2.3% over this two-day period, so Nvidia stock's performance was actually in line with the market's.
Now what
Investors don't have long to wait for material news. Nvidia is slated to report its fourth-quarter and full-year results for fiscal 2022 (essentially the November 2021 through January 2022 period) after the market close on Wednesday, Feb. 16. An analyst conference call is scheduled for the same day at 5:30 p.m. ET.
For fiscal Q4, Nvidia guided for revenue to jump 48% year over year to $7.40 billion and for adjusted earnings per share (EPS) to surge 58% to $1.22. You can read my earnings preview here.
