Flashback Friday: Nvidia Is the Ultimate Chip and Dip

TheStreet
It's finally Friday.

Happy Friyay!

You ready for the weekend? 

Hold your horses, because we do need to get through the top stories before you run off to your happy hours and dinners.

Jim Cramer's Got Some Advice

Still in Nvidia (NVDA) ? Have no fear, Cramer's here. 

Investors still in the chip company may be feeling extra anxious today after the company announced earnings that missed analysts expectations.

Nvidia's revenue forecast for the fourth quarter came out to $2.7 billion, which didn't meet expectations of $3.4 billion.

"We came into Q3 with excess channel inventory post the crypto hangover," CEO Jensen Huang told investors on a conference call late Thursday. "I'm hopeful that now that pricing has stabilized, that customers will come back and buy. I guess when pricing is volatile in the channel, it probably freezes some people waiting for prices to stabilize, and that took longer than we expected frankly."

Cramer gave advice for investors who are still interested in the chip maker, as well as advising investors who are still invested in the company what to do. 

As Friday trading closed, Nvidia was down nearly 19% to $164.38 a share.

Time for a Shake-Up

Facebook Inc.  (FB) is back in the news...again.

TheStreet's Annie Gaus explains why the social media giant is once again in the spotlight and how one analyst plans to solve its woes.

In a note on Friday, Stifel's Scott W. Devitt suggested that the quickest path for Facebook may be to make some changes in the C-suite, writing that: "With Facebook management under more scrutiny than ever, the campaign trail to rebuild credibility will be long and difficult. In our view, Facebook's board and management team could accelerate the credibility rebuild by considering making change(s) at the top of the organization."

The note cited recent reports of management dysfunction and sinking morale at Facebook, which included unflattering details on how CEO Mark Zuckerberg and COO Sheryl Sandberg, along with Facebook's board, responded to growing crises at the company. One of those details was Facebook's use of an opposition research firm called The Definers to smear critics and competitors amid criticism over Russian interference; Facebook ended its relationship with that group on Thursday.

Devitt noted that management changes may not happen, writing that the probability is "low," but noted that hiring a well-respected executive from outside of Facebook could help move the company past its credibility issues. He cited Uber's hiring of CEO Dara Khosrowshahi as an instance where an executive change was implemented to positive results.

Devitt isn't alone in questioning whether Facebook would be better off with a management change. Recently, a group of major shareholders signed on a proposal to oust Zuckerberg as chairman, which is due for a vote at a Facebook shareholder meeting in May 2019.

Yikes. 

Chip Stocks Are Suffering

TheStreet contributor M. Corey Goldman looked at the chip stocks and how they were suffering during Friday trading. 

Shares of chipmakers Advanced Micro Devices Inc. (AMD) and Micron Technology Inc.  (MU)  posted declines on Friday, Nov. 16, in tandem with Nvidia's stock, which dropped more than 18% after the company shocked Wall Street with a big quarterly miss.

Nvidia reported a miss on both its top and bottom lines for the third quarter after the market close on Thursday, Nov. 15, prompting investors to push the stock lower. As of midday on Friday, Nvidia shares were down $37.59, or 18.6%, at $164.80 on the Nasdaq stock exchange.

Shares of AMD and Micron fell in sympathy, with AMD's stock down more than 3.4% at $20.66, and Micron shares down almost 1.2% at $39.44.

TheStreet.com's Jim Cramer correctly predicted a hit for Nvidia back in October. Cramer told TheStreet's Boot Camp for Investors, that's why his trust sold the stock well ahead of Thursday's numbers. 

Broader expectations that demand for other types of chips including DRAM and NAND is slowing, particularly for smartphones, augmented the stock market declines Friday. DRAM prices fell 10% in October and are expected to continue dropping through the first quarter of 2019. NAND prices dropped roughly 15% lower in October. 

Bucking the trend Friday was Intel Corp. (INTC) , which was up 73 cents, or 1.5%, at $48.84.

Alright folks, go take a break. It's finally the weekend.