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Wall Street analysts raised their earnings estimates for Nvidia (Nasdaq: NVDA) by 24% over the last 90 days.
On Thursday, investors sold the stock anyway. They sold the rest of the chip sector right along with it.
Go here to get my top 3 November trades – after the selloff.
When earnings forecasts go up and stock prices go down, it’s worth paying attention.
The Nasdaq fell 5.5%, its worst day since April 2025. The semiconductor index had its worst day since March 2020. More than $2 trillion in market value disappeared in the first hour of trading.
Midterm elections were the cause for the selloff.
Democrats won both chambers of Congress, and dozens of local measures restricting new data centers passed. Investors rushed to price in a slower AI buildout.
Fundstrat’s Tom Lee called it an overreaction. He points out that states facing budget needs will find it hard to turn away the revenue data centers generate. He sees tech stocks rallying 15% to 20% from here.
I think he’s right. And three stocks stand out after Thursday.
Get my top trades for November 6. Here’s the link.
Nvidia closed at $181.60, down 9.3% on the day and 24% below its October record. The stock now trades around 15 times forward earnings. That’s a below market-average multiple for the company that supplies the majority of the world’s AI chips.
Broadcom (Nasdaq: AVGO) fell 10.4% to $291.53. In September, it reported record quarterly revenue of $29.6 billion, up 86% from a year ago. AI chip revenue more than tripled to $16.7 billion. Management guided for $21.7 billion in AI revenue for the quarter that just ended, which would be up 236%.
Micron Technology (Nasdaq: MU) fell the hardest, down 17.5% to $656.39. That puts it 46% below its June high. Micron is guiding for $61.5 billion in revenue this quarter. The stock trades at roughly 5 times forward earnings. The S&P 500 trades near 18.5 times.
The next real test comes on November 17, when Nvidia reports earnings. So far, every signal from the companies themselves points to AI demand running ahead of supply.
Politics moved these stocks on Thursday. Earnings will move them over the next few years. Nvidia, Broadcom and Micron are among my favorites.
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Ian Wyatt
Editor, Daily Profit