Chip stocks crushed by Samsung selloff and AI delays — double down on Nvidia at
Thesis
Samsung's disappointing earnings have triggered a massive selloff across memory and chip stocks, dragging the whole sector down. At the same time, fears over manufacturing delays for Nvidia's next-gen AI servers have fueled a $1 trillion plunge in Nvidia's market value. However, combining this panic with the news that Nvidia's stock is now trading at its cheapest valuation relative to earnings in years—despite bringing in record revenue—suggests the selling has become disconnected from fundamentals. While the broader chip sector might continue to bleed, Nvidia's extreme drop and fundamental revenue strength create a contrarian buying opportunity.
Strategy approach
Build a mean-reversion strategy that enters long NVDA on D1 when the stock drops >5% in a single session and the RSI (14) closes below 30. Exit when the stock crosses above its 10-day simple moving average, with a max hold of 15 days.