Cathie Wood Is Dumping Nvidia (NVDA) Stock. Should You?

Source: rafapress /

Today, the market will be blessed with earnings from the one and only Nvidia (NASDAQ:NVDA) after the bell. These earnings will be key in determining the directional trajectory of where NVDA stock may be headed from here, given how high it has already flown this year.

On a year-to-date (YTD) basis, NVDA stock has already tripled heading into the coming earnings report. Indeed, much of this move is due to what the company announced during its previous earnings report, in which Nvidia massively increased its forward guidance and put forward some incredible numbers. Investors like Ark Invest’s Cathie Wood have been made very wealthy off of these catalysts.

However, Wood is reportedly not taking too many chances heading into this print. Reports are that Wood sold 2,230 shares of NVDA stock — around $1 million worth — ahead of earnings, buying up $8 million worth of Zoom Video (NASDAQ:ZM) instead.

Let’s dive into what to make of this move today.

Cathie Wood Dumps NVDA Stock Ahead of Earnings

Given how violent the move higher in Nvidia has been this year, one can’t really blame Cathie Wood or any other big-time investor for selling into this print. Indeed, it’s the company’s guidance for this quarter that drove much of its previous run. If the company comes short, or signals it’s not going go continue to beef up guidance moving forward, this is a stock that could fall very sharply from here.

Now, it’s also worth noting that this small sale from Wood may be a tiny hedge against a larger position and probably shouldn’t be viewed as some sort of big deal. Wood has billions in assets under management and a $1 million trade on a single day isn’t particularly newsworthy in and of itself.

However, if this move translates into future selling activity from here, maybe there’s some smoke where there’s fire. Wood has proven to be reactive to certain news events, so I’m anticipating that she could sell more if earnings come in weaker than expected. We’ll have to wait and see — it’s going to be an interesting afternoon.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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