Nvidia (NASDAQ:NVDA) experienced a turbulent week, closing on Friday at $202.81, down 2.2% for the session. Over the past five trading days, shares declined 3.9%, yet they significantly outperformed the broader semiconductor sector. The PHLX Semiconductor Index tumbled 10.0% during the same period, meaning Nvidia beat the index by 6.1 percentage points.
The relative strength comes as analysts continue to raise their earnings expectations for the company. Despite the stock's pullback, the consensus estimate for fiscal 2027 earnings per share (EPS) has increased 8.6% over the past three months to $8.99. For fiscal 2028, the projection climbed 14.5% to $12.74. Based on Friday's closing price, these figures imply price-to-earnings multiples of 22.6 and 15.9, respectively, offering investors more earnings per dollar invested than before the selloff.
Market Context
The chip sector's losses were severe. The PHLX Semiconductor Index ended 20.2% below its record high set on June 22, placing it in bear market territory. However, the index remains up nearly 65% year-to-date. Nvidia, by contrast, has risen only about 9% in 2026, underperforming the index on a year-to-date basis but showing resilience during the recent downturn.
The selloff was triggered by renewed uncertainty over returns on U.S. AI investments. China's Moonshot unveiled an open-weight model, prompting investors to reduce holdings in heavily owned chip stocks. Bank of America (NYSE:BAC) analyst Vivek Arya characterized the drop as “a summer reset, not a fundamental reversal,” suggesting the underlying demand drivers remain intact.
Corporate Events
Apple (NASDAQ:AAPL) temporarily overtook Nvidia in market capitalization on Friday, with both companies valued at around $4.9 trillion. The shift in relative value underscores the market's reevaluation of AI-related names.
Alphabet (NASDAQ:GOOGL) is set to report earnings next week, with results due Wednesday. Investors will scrutinize the company's data-center investment plans, as any reduction in spending could impact the broader AI ecosystem, according to Kevin Mahn, chief investment officer at Hennion & Walsh.
Intel (NASDAQ:INTC) will release its quarterly report on Thursday after markets close. The market will look to its guidance for signs of stability in the chip sector. Nvidia itself is scheduled to report on August 26. In the interim, chip earnings and customer spending remain the most relevant indicators for the sector.
Technical and Volume Data
Nvidia's stock saw intraweek volatility, opening Monday at $203.53, climbing to $212.50 by Wednesday before retreating. Trading volume on Friday reached 144.3 million shares, below the 65-day average of 156.9 million, suggesting the selloff may lack conviction.
A reduced spending plan from Alphabet or an additional leveraged selloff could remove the buffer that has allowed Nvidia to outperform the chip index. Alphabet's report on Wednesday will serve as a key test of whether Nvidia can maintain its relative strength.
