Why Softbank Wants to Offload Stake in NVIDIA



End of cryptocurrency boom blamed for recent NVIDIA stock decline

NVIDIA (NVDA) stock has had a dream run in the last three years. The stock has shot up over 500% in these three years. However, the last couple of months have been bad for the company, and the stock has declined by ~45%. NVIDIA stock had the biggest one-day drop in more than a decade on November 16 when its stock fell 19%.

The company reduced its outlook for Q4 2018, saying that the demand for older and newer chips for gaming had slowed considerably. Pascal, its older-generation gaming chips, had an unexpected increase in channel inventory. Its new Turing chip also experienced slower sales than expected. The company blamed the end of the cryptocurrency mining boom for the slowdown in demand for its GPUs. The end of the cryptocurrency boom also impacted AMD (AMD) stock, which has also declined by 50% since the beginning of October.

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According to Bloomberg, Softbank (SFTBY) has plans to sell its stake in NVIDIA. This decision by Softbank could be influenced by the recent decline in NVIDIA stock. Is Softbank right in assuming that the stock has peaked? Maybe not. Read NVIDIA’s Selling Opportunity Is Gone—Time to Buy? for more analysis.


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