Nvidia crashes to pre-AI boom prices despite record sales — contrarian bounce se
Thesis
A combination of delayed next-gen rack systems and a broad chip selloff has wiped $1 trillion from Nvidia's value in under two months. However, this panic has pushed the stock's valuation (price relative to actual earnings) back to levels not seen since before the AI revolution, despite the company pulling in record revenue. When a dominant market leader becomes this cheap relative to its actual cash flow, and traders step in to buy the stock even as the rest of the sector falls, it often signals the selling pressure is exhausted. We are connecting the delay news, the multiyear valuation low, and the intraday buy signal to justify a value-driven bounce trade.
Strategy approach
Construct a mean-reversion strategy for NVDA on the D1 timeframe. Calculate the 14-day RSI. Enter long when RSI drops below 30. Exit when RSI crosses back above 55, or set a hard 21-day holding period. Use an 8% stop loss based on the entry price.