Nvidia Stock Tumbles as Earnings Loom and GPU Price Hikes Approach

Nvidia's stock has taken a hit in recent days as investors focus on the upcoming earnings report, which will provide insight into its revenue and profitability growth. The company is also set to increase GPU prices, a move that could boost its revenue but carries risks.

The price hikes will mainly affect products shipped in 2028, including systems with the flagship Vera Rubin and Grace Blackwell chips. Nvidia cites rising costs of doing business, including memory and other servers, as the reason for the increases.

While this may help boost revenues in the short term, there are potential risks involved. Some customers may opt to front-load purchases to avoid price hikes or switch to internal chips or alternatives. Companies like Amazon, Microsoft, Google, and Meta Platforms are already working on improving their AI training capabilities with their own custom chips.

Nvidia's earnings report is expected to show a 96% revenue growth, bringing its revenue to $92 billion for the last quarter. The company's guidance for the third quarter is expected to be $103 billion, but analysts predict that it will likely beat forecasts, putting the actual figure at around $112 billion.

The company's stock price has dropped from a high of $227 to $214.75 in recent days, retesting its support level and stabilizing at the 50-period Exponential Moving Average (EMA). The technical analysis suggests that there is a possibility for a bounce back to the key resistance level of $227.