Beijing early morning on November 16th, United States after the market close on November 15th Eastern time.
Nvidia's Financial Report is like a depth bomb, smashing into the already turbulent US Stocks market.
Zhao Chen's office is brightly lit.
Su Wantang drew the curtains tightly, and there were two laptops spread out on the coffee table, one showing the data stream of Bloomberg Terminal, and the other connected to the trading system of Era Vanguard in United States.
Chen Xi was sitting on the edge of the sofa, with a stack of Financial Report's newly printed abstracts on his knees, his brows furrowed into the Chinese character "Chuan".
"Here we come." Su Wantang stared at the screen and said softly.
Zhao Chen walked behind her, put one hand on the back of the sofa, and looked at the dense numbers.
Third quarter revenue was 3.18 billion US Dollar, compared with the expected 3.24 billion.
It's not much different, but the market won't see it that way.
Game business is 1.76 billion, expected to be 1.89 billion.
The difference is a full 130 million. This is the core cash cow of Nvidia.
Data Center 792 million, expected 821 million.
Signs of slowing growth are no longer hidden.
The most terrible thing is the revenue guidance for the fourth quarter-2.65 billion to 2.75 billion US Dollar.
The market expectation is 3.4 billion.
The gap is close to 20 percent.
"This is not lower than expected," Chen Xi's voice was a little tight, "This is a cliff."
Zhao Chen said nothing and continued to scan down.
Financial Report There is an inconspicuous message hidden in the note:
Due to the decline in demand for encryption chips, inventory impairment charges of 57 million US Dollar were accrued.
The number itself is not big, but the problems behind it are fatal enough--
Nvidia's channels are full of old chips that cannot be sold.
The cryptocurrency bubble has burst.
Those Pascal architecture graphics cards that were once snapped up by miners are now being thrown into the second-hand market like shells after the tide ebbs.
New cards cannot be sold, no one wants old cards, and the new generation RTX 20 Series, which is priced high, has no one interested in it because it lacks game support.
"The old card cannot be cleared, and the new card cannot be sold."
Zhao Chen finally spoke, his tone as calm as if he was reading a weather forecast,
"Old Huang can't solve this situation for the time being, but he will find a way."
Su Wantang raised his head and looked at him. "Xiao Chen, is this the Financial Report you are waiting for?"
"Yes! I have been waiting for more than a year." Zhao Chen straightened up, walked to the window, and reached out to open a corner of the curtain.
Jiangbeizui was still brightly lit in the early morning. Across the Jialing River, the neon lights on the other side were dimmed into a blur of light in the mist.
His voice came from the window, "Haven't we been waiting for this day since the Bitcoin bubble burst at the end of the year?"
He turned around and looked at Su Wantang and Chen Xi.
"The cryptocurrency bull market spawned the false boom of Nvidia.
Miners are rushing to buy graphics cards regardless of the cost, channel dealers are desperately hoarding goods, and the production capacity of Nvidia is running wild.
Everyone feels that this feast will never end."
Zhao Chen's tone is calm, but every word is like a nail hammering into the air.
"But any prosperity that breaks away from Fundamentals will eventually return.
Bitcoin has dropped from 17,000 US Dollar in December last year to now. The miners can't take the blame, so who will buy graphics cards?"
Chen Xi closed Financial Report in his hand and took a deep breath:
"So today's plunge was never a black swan."
"It's a gray rhinoceros." Zhao Chen took her words and said,
"Everyone can see it coming, but most people choose to close their eyes."
The landline phone on the desk rang.
Su Wantang walked over to pick it up, listened for two seconds, and handed the microphone to Zhao Chen: "Lawyer Lin."
Zhao Chen took the microphone.
"Zhao Zong, Nvidia has fallen by more than 15% after the market opened."
Lin Shicheng's voice came from the other side of the ocean, with irrepressible excitement. The signal was not very good, and there was some rustling noise.
"After the market officially opens, there is a high probability that it will go up to 20%. The window you asked us to wait for has arrived."
Zhao Chen's hand holding the microphone did not move.
Of course he knows what this means.
Nvidia's share price has risen more than tenfold in the past two years, soaring from thirty US Dollar in early 2016 to nearly three hundred US Dollar in October this year.
The market value has expanded from 20 billion US Dollar to more than 100 billion US Dollar.
The entire Wall Street put Nvidia on the altar, and Goldman Sachs put it on the "convinced list". Analysts rushed to raise their target prices, as if this graphics card company would never encounter a cycle.
But cycles are never absent, only late.
"What is the current market value?" Zhao Chen asked.
"After-hours trading has dropped to around 95 billion US Dollar, and the stock price is about 161 US Dollar."
Lin Shicheng reports data quickly,
"If the programmed Stop-loss Selling and Panic Selling are triggered after the official opening, there is a high probability that it will continue to drop. Market sentiment has completely collapsed."
Zhao Chen was silent for a few seconds.
Ninety-five billion.
Before his rebirth, he clearly remembered that Nvidia's stock price finally fell to more than 120 US Dollar in this round of decline before it truly bottomed out, and its market value once fell below 85 billion US Dollar.
Counting from the highest point of nearly 300 US Dollar, the cumulative decline has exceeded 55%.
It was not until the spring of 2019 that the growth of Data Center's business was re-priced by the market, and the stock price slowly climbed up.
As for the epic market value that the AI wave later pushed Nvidia to a market value of one trillion US Dollar, that was a few years later.
But right now, there is only panic in the entire market.
And panic is the best buying point.
But not now.
"Lawyer Lin," Zhao Chen finally spoke, his voice as steady as the tide in a deep-water port, "Don't be in a hurry."
There was silence on the other end of the phone for a moment.
"Don't want to buy today?"
"Don't buy it."
There was no hesitation in Zhao Chen's tone,
"Today is the first day of the plunge. Panic Selling, programmed selling, and financing liquidation. When these forces are released in a concentrated manner, the stock price is irrational.
After the first big negative line, there will be people who copy the bottom line to enter the market, there will be a rebound, and then the bottom line will be buried, and then there will be a second wave of decline.
The real bottom is ground out through repeated despair."
He paused and his eyes fell on the Bloomberg Terminal screen on the coffee table.
The after-hours trading curve of Nvidia is still going downward, and new stop-loss orders are triggered every minute.
"The target range I give you is - the market value falls below 90 billion US Dollar."
Lin Shicheng did a quick mental calculation:
"Nvidia has a total share capital of 590 million shares and a market value of 90 billion. The corresponding stock price is 152 US Dollar fifty cents.
It will fall another 5% from the current after-hours price."
"Yes." Zhao Chen said, "If the price is below 90 billion, we will start building positions in batches.
There is no specific limit on the amount, but the pace should be slow and don't eat it all in one go.
When the market is truly panicked, liquidity will dry up, and large orders will push up prices.
Eat in small bites, like a crocodile hunting."
"Understood."
Lin Shicheng paused for a moment, seeming to record something,
"As for the funds - Era Vanguard currently has available funds, I will synchronize them with you."
"You said."