Nvidia (NVDA) Stock: Cathie Wood Doubles Down as China Clouds Gather

TLDR

Table of Contents

Nvidia (NVDA) shares rose 0.6% in premarket trading ahead of Q1 earnings, with analysts expecting $0.74 EPS and $43.34 billion revenue
China chip restrictions on H20 sales could create a 10% hit to guidance, causing earnings uncertainty
Cathie Wood’s ARK funds bought $4.7 million worth of Nvidia stock on May 27, purchasing 34,684 shares total
Wood made larger purchases in AMD ($10.7 million) and CRISPR ($9.67 million) while selling $9.29 million of Tesla
Analysts maintain Strong Buy rating with average price target of $164.21, suggesting 21.2% upside potential

Nvidia shares edged higher in premarket trading Wednesday as investors prepared for the chip giant’s first-quarter fiscal 2026 results. The stock gained 0.6% to $136.33 before regular trading began.

The modest gain followed a stronger 3.2% rise on Tuesday. However, the usual pre-earnings excitement appeared muted this time around.

China sales restrictions emerged as the primary headwind weighing on investor sentiment. The limitations on Nvidia’s H20 chip sales to Chinese markets could deliver a meaningful blow to near-term guidance.

“I don’t think it is going to be a catalyst quarter. It’s noisy– you have the China restrictions, etc,” said Stephanie Link, chief investment strategist at Hightower Advisors. She estimated the H20 issue could result in about a 10% hit to July quarter guidance.

Link believes this potential impact is already reflected in the current stock price. The market seems to have priced in some of the China-related headwinds.

Wall Street expects Nvidia to report adjusted earnings per share of $0.74 for the quarter. This represents a 21.3% increase compared to the same period last year.

Revenue projections show even stronger growth expectations. Analysts forecast sales will surge 66.5% year-over-year to reach $43.34 billion in Q1.

Wood Makes Strategic Moves

Cathie Wood made headlines by purchasing Nvidia stock just before the earnings announcement. Her ARK Innovation ETF bought approximately 21,400 shares on May 27.

Cathie Wood’s ARK Invest scoops up $4.7M of Nvidia $NVDA shares ahead of earnings later today 👀
She also bought 97,068 shares of $AMD worth $11M 🔥 pic.twitter.com/dKt0k4aCPi
— Trader Edge (@Pro_Trader_Edge) May 28, 2025

The ARK Next Generation Internet ETF added another 13,284 shares the same day. Combined, these purchases totaled $4.7 million worth of Nvidia stock.

The timing of Wood’s purchase suggests confidence in Nvidia’s upcoming results. Her funds moved into the stock despite the China-related concerns.

However, Wood’s largest semiconductor trade involved Nvidia’s rival AMD. Her funds purchased 97,068 AMD shares worth over $10.7 million on the same day.

This move reflects Wood’s growing confidence in AMD relative to Nvidia. The larger AMD purchase suggests she sees better value in the alternative chip maker.

Wood also made other portfolio moves on May 27. She bought 262,459 shares of CRISPR Therapeutics worth $9.67 million.

In a surprise move, Wood sold 273,377 Tesla shares valued at $9.29 million. This sale involved one of her historically favorite positions.

Production and Margin Outlook

Beyond China concerns, investors are monitoring Nvidia’s new Blackwell chip production ramp. The rollout timeline and manufacturing costs will impact future margins.

CFRA Research analyst Angela Zino expects Nvidia to guide toward wider margins as Blackwell costs decline. However, she noted that potential tariffs create some uncertainty around this outlook.

Zino remains optimistic about recent policy developments favoring Nvidia. She highlighted Sovereign AI opportunities as a positive catalyst.

The analyst expressed confidence in Nvidia’s product pipeline. This suggests strong demand visibility beyond the current quarter.

Despite China headwinds, analyst sentiment remains overwhelmingly positive. Nvidia commands a Strong Buy consensus rating on TipRanks based on 32 Buy recommendations.

Only four analysts maintain Hold ratings while just one recommends selling. The average price target sits at $164.21, implying 21.2% upside from current levels.

Over the past year, Nvidia stock has gained nearly 19%. The company reports earnings after market close today.

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