Nvidia (NVDA +1.30%) shares sank as much as 5% today, outpacing a marketwide pullback. As of 12:23 p.m. ET, Nvidia stock was still down 3.3%, while the Nasdaq Composite index was down 1.25%.
Today's drop comes after the latest leg higher for the artificial intelligence (AI) leader's stock. Nvidia has surged more than 15% in the last month. With its highly anticipated earnings report due next week, today's drop might be a nice time to gain exposure.
Image source: The Motley Fool.
China is just a bonus
Nvidia is dropping more than the market today after there was no new announcement regarding its business in China, following CEO Jensen Huang's visit with President Trump there this week. Nvidia's H200 chips can now be sold in China, but no major orders have been announced. That may be because Chinese companies are finding a more adequate supply of AI chips domestically.
Chinese tech giants Tencent and Alibaba have recently said they expect increased production and supply of Chinese chips this year, along with greater use of in-house technology. That's not great news for Nvidia.
NASDAQ: NVDA
Key Data Points
But Nvidia's guidance has assumed no China business. Any sales of its lower-tier H200 chips there would only add to its financial results. Investors should consider that a bonus, if Nvidia does attain new business there.
In the meantime, its sales continue to soar elsewhere. Nvidia has been beating its already lofty guidance in recent quarterly reports. If it exceeds estimates again in its report being released Wednesday, May 20, after the bell, Nvidia stock could resume its move higher. That would make today's dip a timely buying opportunity.
